Inventory decisions on the transportation system and carbon emissions under COVID-19 effects: A sensitivity analysis

The COVID-19 pandemic has created multiple problems in the existing transportation system. The contribution of this study is to guide logistics managers as they make ordering decisions within a disrupted transportation system. In the overall supply chain system, inventory decisions have been either compromised or challenged. Traditional inventory decisions that consider preplanned transportation facilities (and speeds) are currently becoming obsolete, predominantly in post-COVID times due to delays in the delivery of products and higher delivery costs. Therefore, businesses such as retailers must align ordering and pricing decisions to maintain a sustainable profit. To address this issue, this study investigates optimum inventory decisions under the pandemic’s effects while considering the transportation cost as proportional to COVID-19 intensity. This study also considers product deterioration, time-dependent holding costs, price-dependent demands, and carbon emissions from vehicle operation and intends to establish a harmonious relationship among these attributes. The optimization of green technology investment is studied to reduce emissions due to transportation. Some theoretical derivations and numerical examples are given, and they are followed by a sensitivity analysis to extract important managerial insights into the effect of COVID-19. The manager can set an optimal selling price and the cycle length by carefully planning the number of trips in considering the rate of the outbreak and its effect on the increasing transportation cost.