Investigating the green inventory control problem considering liquidity risk: Application in the dairy industry

• Published in: Sustainable cities and society 2023-05, Vol.92, p.104479, Article 104479
• Main Authors: Taheri, Mona, Amalnick, Mohsen Sadegh, Taleizadeh, Ata Allah, Mardan, Ehsan
• Format: Article
• Language: English
• Subjects: Dairy industry; Environmental issues; Inventory control; Liquidity risk; Multi-choice meta-goal programming
• ISSN: 2210-6707; 2210-6715
• DOI: 10.1016/j.scs.2023.104479

•The green inventory management problem by considering financial issues is investigated.•The utilization of the material substitution is considered.•A real-world case study is investigated.•Sensitivity analysis and managerial suggestions are provided. In recent years, increasing concern regarding environmental issues has attracted the attention of researchers and managers to incorporate the greenness concept into business activities. Furthermore, one of the critical problems that plays an important role in the productivity of each company is the inventory management problem considering financial issues. Liquidity risk and inventory value must be closely monitored. Hence, this research studies the green inventory control problem considering liquidity to help managers to make best decisions in competitive environment. To achieve this objective, a multi-objective mathematical model is proposed that maximizes profit, minimizes risk, and maximizes greenness. Also, the proposed model is solved by a recent efficient method named multi-choice meta-goal programming by considering a real-world case study in the dairy industry. In addition, the impact of sales in different sales channels with different accounts receivable days and material substitution are examined. The obtained results show that increasing the raw milk allocated totally increases the quick ratio and contribution margin. Moreover, the usage of environmentally friendly materials have an extreme effect on customers to be loyal customers. Thus, the company's efficiency and profitability have increased due to considering hidden expenses. Finally, managerial insights and theoretical implications are presented.