Preprint Article Version 1 This version is not peer-reviewed

Sustainability in Material Purchasing: A Multi-Objective Economic Order Quantity Model under a Cap and Trade System

Version 1 : Received: 4 November 2018 / Approved: 5 November 2018 / Online: 5 November 2018 (15:12:06 CET)

A peer-reviewed article of this Preprint also exists.

Battini, D.; Calzavara, M.; Isolan, I.; Sgarbossa, F.; Zangaro, F. Sustainability in Material Purchasing: A Multi-Objective Economic Order Quantity Model under Carbon Trading. Sustainability 2018, 10, 4438. Battini, D.; Calzavara, M.; Isolan, I.; Sgarbossa, F.; Zangaro, F. Sustainability in Material Purchasing: A Multi-Objective Economic Order Quantity Model under Carbon Trading. Sustainability 2018, 10, 4438.

Journal reference: Sustainability 2018, 10, 4438
DOI: 10.3390/su10124438

Abstract

Sustainability in material purchasing is a growing area of research. Goods purchasing decisions strongly affect transportation path flows, vehicle consolidation, inventory levels and related obsolescence costs. Within a global sourcing context, companies experience the need of new decision making approaches capable to consider a large variety of factors, also linked with society and environment. Environmental impact assessment has become a key requirement for materials purchasing and transportation decisions since global warming is a rising concern both in academic and industrial researches. In fact, it is well known that the freight transport industry is responsible for large amounts of carbon emissions contributing to global warming. In this paper, we initially analyse and compare the environmental economic policies established by the International Governments in relation to the carbon trading systems adopted. Then, we develop a multi-objective lot sizing approach useful in practice to define the sustainable quantity to purchase when a Cap and Trade mitigation policy is present. We further analyse the model behaviour according to different carbon price values by demonstrating that carbon prices are still far too low to motivate managers towards sustainable purchasing choices.

Subject Areas

multi-objective approach, sustainable purchasing, lot sizing, Cap and Trade, Economic Order Quantity, Carbon Price

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