Returnable containers management in a single-vendor multi-buyer supply chain with investment in reducing the loss fraction

Elsevier, Measurement, Volume 143, September 2019, Pages 93-102.
Authors: 
Xiangxiang Fan, Xianhao Xu, Bipan Zou, Qingguo Bai

With the advantages of reducing CO2 emissions and improving the sustainability of supply chain, returnable containers have been widely used in logistics processes. This paper considers a returnable containers supply chain that consists of a single vendor and multiple buyers. To minimize the total cost of the system and balance the containers flow, we assume that the buyers can invest in employee training to reduce the loss fraction of returnable containers. We build an inventory model for the system, design an iterative procedure using Mathematica to minimize the total cost and compare with the case that the buyers do not invest. The results show that the optimal cost of the case where the buyers invest is much lower than that of the case where the buyers do not invest. Moreover, the quantity of returnable containers the buyers receive and the replenishment frequency are both lower than the case that the buyers do not invest.