Inventory and fleet purchase decisions under a sustainable regulatory environment

ABSTRACT

This work studies the direct impacts of environmental policies on logistics practices. Specifically, the authors estimate the potential changes in inventory and fleet purchase decisions under a set of policies designed to improve the environmental efficiency of transport activities, through a reduction of overall transportation emissions; and requirements for a fleet mix to include zero and near-zero emission vehicle technologies, or, minimum vehicle type shares. The work introduces a constrained stochastic multi-objective joint replenishment problem (S-MJRP) to evaluate the policies while considering logistics costs and emissions as objectives. Moreover, the authors developed a solution algorithm and conducted empirical analyses. The results highlight the trade-off between capital investments in zero-emission vehicles and the logistics costs required to abide by the requirements of the mentioned regulatory policies. The results provide insights for both private and public stakeholders as they consider the logistics challenges and opportunities generated by these sustainability policies.

KEYWORDS:

• Zero emission vehicles
• inventory management
• JRP
• multi-objective
• environmental policy

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. Sustainable Communities and Climate Protection Act of 2008–SB 375; California Global Warming Solutions Act of 2006–AB 32; Community Air Protection Program–AB 671; California Environmental Quality Act – SB-617; and Clean Energy & Pollution Reduction Act–SB 350.

Additional information

Notes on contributors

Miguel Jaller

Miguel Jaller is an Associate Professor in the Department of Civil and Environmental Engineering at the University of California, Davis, and Co-Director of the Sustainable Freight Research Centre at the Institute of Transportation Studies (ITS) Davis. He has strong theoretical foundations and practical experience in industrial and transportation engineering and management. He received his B.Sc. and M.Sc. in Industrial Engineering from Universidad del Norte, Colombia, and his M.E. in Transportation Engineering, M.Sc. in Applied Mathematics, and Ph.D. in Transportation Engineering from Rensselaer Polytechnic Institute. His multi-disciplinary research interests are in the areas of freight transportation, sustainable transportation systems, disaster response logistics, supply chain management, and operations research. His work concentrates on analysing the societal and private impacts of transport and logistics operations, technology and policy; and developing decision making tools to achieve a sustainable transportation system.

Carlos Otero-Palencia

Carlos Otero-Palencia is a first year Ph.D. student in the Civil and Environment Engineering Department at UC Davis. He has BAs and master’s degree in Industrial Engineering from Universidad del Norte, Barranquilla-Colombia, where Carlos was also an assistant professor. His research focuses on supply chain management systems, collaboration in logistics, supply chain finances, green-friendly technologies in transportation, and optimisation. He is developing logistic strategies to reduce both logistic cost and carbon emissions in the supply chain operation.

Ruben Yie-Pinedo

Ruben Yie-Pinedo is a full time professor at Universidad del Norte, Colombia. Hi teaches simulation, algorithm design and heuristics, among others. He is an electronic and robotic engineer and he graduated from his Ph.D. on Industrial and Systems Engineering at the State University of New York (SUNY) at Buffalo in 2013. His research focuses on two main areas: routing of special vehicles under conditions that has the potential of compromising vehicles safety (for example, routing hazmat materials under the risk of natural disasters, and patrol routing to increase network safety, among others). The second area of research is evolutionary computation which comprises designing heuristics and metaheuristics to solve complex engineering problems.