A loss factor based approach for sustainable logistics

Logistics plays a key role for industries since it reveals a critical function designed and managed to pursue economic goals. A large amount of literature is available, providing models which can be used to minimise logistic costs. However, models usually neglect externalities, i.e. social and environmental costs that have to be considered in the framework of sustainable manufacturing. In this article, the authors propose an inventory model to support decision making in means of transport selection and order lot sizing (sustainable order quantity) which minimise both logistic and environmental costs. Dependency of logistic and environmental costs is shaped as functions of the ‘loss factor’, a parameter adopted to classify means of transport based on loss in transport energy. Time and cost constraints as well as the actual means of transport availability reduce the domain of theoretical solutions and limit the set of feasible ones. When there are no feasible solutions, three different strategies are identified and discussed to support logistic management in meeting sub-optimal feasible logistic performance under time, cost and means of transport constraints.