A quantitative model proposal for sustainable inventory routing problem

As a result of the increase in negative environmental conditions such as greenhouse gas emissions and global warming, ecological awareness has increased worldwide. Moreover, social sustainability has come to the fore with the decrease in social rights such as the growth in the number of occupational accidents and the noise level. Therefore, it has become inevitable for companies to carry out their operations by taking environmental and social externalities into account. Under globalization and increased competition, companies aiming to reduce their costs focus on the efficiency of inventory and transportation activities, which are among the highest cost items in logistics operations. In the literature, the problem of inventory routing, which addresses inventory and routing decisions simultaneously, has been frequently studied by researchers. In this study, a mixed integer linear programming model is proposed for the sustainable inventory routing problem. While trying to achieve cost minimization in the developed mathematical model, attention is also paid to environmental and social sustainability issues. The following features distinguish this study from the existing attempts, i.e., explicit fuel consumption calculation, the use of refrigerated vehicles for perishable products, waste collection and delivery to the disposal center, employees opportunity to regulate their working hours. Besides, customer demand uncertainty is respected to better address real-life problems. Numerical analyses show that the use of the proposed mathematical model contributes to social sustainability in terms of providing the advantage of organizing working hours for employees, and to environmental sustainability by collecting waste products and minimizing fuel consumption. Keywords Logistics management, sustainability, vendor managed inventory, inventory routing problem, closed-loop supply chain