What is it about?
It shows the impact of separating transport cost/fuel prices and cost of transport emissions on lot size and order cost using EOQ.
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Why is it important?
Fuel costs have been increasing at a much higher rate than the overall inflation, which includes oil. Therefore, increase in fuel prices is not in line with the increase in rest of the components of order cost.
Perspectives
This brings the need to consider travel distance (fuel cost ) as a decision variable in supply chains and treat it separately from set up/order cost.
Dr. Amulya Gurtu
Austin E. Cofrin School of Business, University of Wisconsin Green Bay
Read the Original
This page is a summary of: Impact of fuel price and emissions on inventory policies, Applied Mathematical Modelling, February 2015, Elsevier,
DOI: 10.1016/j.apm.2014.08.001.
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