A sustainable production-inventory model with CO₂ emission, electricity and fuel consumption under quality degradation and stochastic demand: a case study in the agri-food industry

This study aims to develop a Sustainable Integrated Production-inventory (SIPI) model considering carbon emissions, electricity consumption, and fuel consumption in a stochastic demand. The proposed model also involves multiple raw materials and quality degradation of raw materials and considers the capacity constraints of vehicles to deliver raw materials and finished products. To optimize the proposed SIPI model, Harris Hawk optimization (HHO) procedure is proposed as the problem optimization procedure, and a case study is presented on Agri-Food Industry in Indonesia. To provide appropriate policy recommendations, sensitivity analysis of emission tax, electricity tariff, fuel price, and demand uncertainty on Expectation Total Profit (ETP), carbon emission, electricity consumption, and fuel consumption are presented. The results show that increases in emission taxes, electricity tariffs, and fuel prices impact the trade-off between ETP, carbon emissions, electricity consumption, and fuel consumption. Meanwhile, managing demand uncertainty can increase ETP and decrease carbon emissions, electricity consumption, and fuel consumption. Therefore, this study provides policy recommendations for reducing demand uncertainty by increasing collaboration between producers, retailers, and customers. In addition, producers must be able to predict demand correctly.