Optimal inventory control with consideration for LCA

This paper proposes a new performance evaluation approach to an inventory management system based on an environmental conscious manufacturing system such as a remanufacturing system with consideration for Life Cycle Assessment (LCA). We here formulate an inventory system with single item based on newsboy problem. The system is evaluated by the total cost that includes the holding, the backlogged, the disposal and the CO2 penalty costs. In this approach, we consider two types of inventories: one is the actual product inventory in a factory whereas the other is the LCA inventory that denotes CO2 emission for all the life cycle of the product. This model also includes disposal and recycle rates. Using the suggested model, we can obtain the total inventory cost with consideration for the environment. Numerical examples are considered to illustrate the implementation of the methodology.