Influence of the environmental impact of logistics operations on the centralization strategy

Abstract

Several factors must usually be taken into account when deciding the design of a supply chain network. In most cases, the economic impact and the resulting service quality are the most common. In this sense, one of the strategies with a big impact in both factors is which inventory centralization level is the most appropriate. High decentralization levels usually provides a better service but with a higher costs due to a more inefficient use of resources. However, the environmental impact of this decision has not been considered in this equation. Here it is analyzed whether considering environmental impact could affect the decision regarding the centralization level. An experimental framework has been designed to check the influence of two factors (the clustering of the clients and their closeness to the manufacturing plant), using a MILP model to look for the best distribution network for each instance.