Oyegunle, Omotayo (2023) The Impact of Green Metrics on Inventory Transshipment. Masters thesis, Concordia University.
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Abstract
Green is associated with life and is becoming increasingly engrained in not just life, but the way people do business as well. In recent years, a growing number of business operations have adopted various green metrics to limit their carbon footprints and environmental pollution, drive sustainable operations, contribute more to sustainability projects, and appear more socially responsible within the industry and host communities. While these initiatives target reducing carbon footprints, their impact on daily operations in a sharing economy is yet to be explored. In this thesis, I performed a thorough review of green supply chains, recent green practices, and metrics adopted in various organizations, followed by a comparative study to analyze the impact of operational decisions in inventory and transshipment when green metrics are considered. I extended the classical inventory transshipment model with two newsvendors’ retailers by allowing the retailers to incorporate direct or indirect green metrics as part of the objective function. In this setting, I explored three central research questions: 1) How would the adoption of green metrics impact the expected profit and equilibrium order quantities under inventory transshipment? 2) Would green metrics negatively or positively impact the coordinating transshipment prices? 3) What is the impact of direct vs. indirect green metrics on expected profit and equilibrium order quantities? Based on extensive numerical simulation, I find that when the profit margin is high, the impact of green metrics is limited—there is almost no change to a slight decrease in expected profit and the equilibrium order quantity when green metrics are considered. However, when the profit margin is low, the green metrics may improve the expected profits while reducing equilibrium order quantities. Interestingly, introducing green metrics does not affect coordinating transshipment prices, irrespective of profit margins. Direct versus indirect metrics have a limited impact on equilibrium order quantity and expected profit. My study contributes to the research by identifying the operational benefits of adopting green metrics. As an extension, this work may create a foundation for further work to determine the cost and benefits of implementing green metrics in practice and the key trade-offs in sustainability or social responsibility.
| Divisions: | Concordia University > John Molson School of Business > Supply Chain and Business Technology Management |
|---|---|
| Item Type: | Thesis (Masters) |
| Authors: | Oyegunle, Omotayo |
| Institution: | Concordia University |
| Degree Name: | M.S.C.M. |
| Program: | Supply Chain Management |
| Date: | 22 August 2023 |
| Thesis Supervisor(s): | Huang, Xiao |
| Keywords: | Green metrics, green practices, sustainability, green supply chain, inventory transshipment, newsvendor, supply chain coordination |
| ID Code: | 992668 |
| Deposited By: | Omotayo Oyegunle |
| Deposited On: | 17 Nov 2023 15:00 |
| Last Modified: | 17 Nov 2023 15:00 |
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