Energy considerations for the economic production quantity and the joint economic lot sizing

Abstract

The increased awareness on sustainability, along with several governments’ actions for setting greenhouse gas restrictions, has recently generated a relevant pressure on industries towards the improvement of environmental performances. Among the several aspects, companies’ focus is mainly on energy use, firstly for its relevant and direct impact on the total cost, and secondly for its environmental linkage. The aim of this contribution is the integration of the energy-related objectives in lot sizing, extending the economic production quantity from the manufacturer point of view and extending the joint economic lot size model from the single-vendor single-buyer supply chain perspective, so as to show how this approach can lead to a more sustainable production process. The present work proposes a novel framework for dimensioning production lot sizes, based on both economic and energy implications in processes characterized by a variable production rate. Furthermore, an increased attention for the sustainability of the production–inventory system is introduced by considering energy as a key factor in the lot sizing problem, due to the close link between energy and environmental concerns. A traditional agreement and a vendor managed inventory with consignment stock for the joint economic lot sizing have been investigated explicitly formulating energy in production aspects. A numerical example is also presented to compare the behaviour of the models.