An inventory model of supply chain disruption recovery with safety stock and carbon emission consideration

Managing highly evolved supply chains and maintaining environmental sustainability at the same time is not easy, especially when it is vulnerable to various disruption risks. In the event of a disruption, the sustainability of a supply chain will be compromised as a consequence of attempting to quickly recover from the disruption with minimal costs. However, a balance can be achieved between sustainability and recovery. Companies can maintain its sustainability, while recovering its operations with a comprehensive analysis of the decision criteria for the intended system. This study presents a recovery model of a two-stage serial supply chain subject to supply disruption with consideration of safety stock and carbon emission. The system consists of a single manufacturer and a single retailer, while the carbon emission consideration is from the transportation activities during the recovery cycle. The model is capable of determining the new recovery schedule of the manufacturer and the retailer, the optimal safety stock level, and the carbon emission cost impact during recovery. The results show that for a range of short disruption periods, the optimal safety stock level is significantly affected by the holding cost values. Furthermore, the cost of carbon emission is dependent on the number of recovery cycles, the distance between supply chain entities, and the social cost of carbon at the time of the disruption. A comparison of two disruption scenarios with different transportation arrangement illustrates a solution for a better recovery plan with faster recovery cycles, lower total recovery cost, and without any change to carbon emission cost impact. This study contributes to the supply disruption literature with the findings on how safety stock and environmental effect consideration affect the disruption recovery decision-making process in term of lot sizing and transportation arrangement. (C) 2018 Elsevier Ltd. All rights reserved.