System dynamics model of production-inventory-routing system in the green supply chain

Fierce competition in the global markets forced companies to improve the design and management of supply chains, because companies are always looking for more profit and higher customer satisfaction. The emergence of the green supply chain is one of the most important developments of the last decade. It provides an opportunity for companies to adjust their supply chains according to environmental goals and sustainability. The integrated production-inventory-routing is a new field that aims to optimize these three decision-making levels. It can be described as follow: a factory produces one or more products, and sells them to several customers (by direct delivery or a specific customer chain). The current study aims to model a production-inventory-routing system using a system dynamics approach to design a green supply chain under uncertain conditions. For this purpose, first, the association between selected variables was determined. Then, the proposed model was validated. Finally, to identify variables with the highest influence, four scenarios were developed. The results indicated that minimum total transportation cost, the total warehouse capacity of the supply chain, and the maximum production rate are the most influential strategies to achieve ideal condition.