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http://dx.doi.org/10.5762/KAIS.2017.18.6.653

Analysis of Operation Cost Savings Effects of Direct Delivery Logistics Strategy Considering Carbon Emission  

Kim, Mi-Rye (Transportation and Logistics System & ITS Engineering, University of Science and Technology)
Cho, In-Ho (Propulsion System Research Team, Korea Railroad Research Institute)
Publication Information
Journal of the Korea Academia-Industrial cooperation Society / v.18, no.6, 2017 , pp. 653-661 More about this Journal
Abstract
This study compares and analyzes the operation costs of traditional and direct delivery strategies considering carbon emissions. For the determination of minimum operation costs and order quantity, we use the Economic Order Quantity (EOQ) model, which is the proper method for calculate the operation costs by logistics strategy. Using the classical EOQ model, we expand the EOQ model considering carbon emissions and domestic logistics environment. We conduct an empirical study on two agri-food logistics strategies under limitation of the carbon emissions using the expanded EOQ model. From the results of the empirical study, we find that the operation costs of direct delivery strategy are about 50% lower than those of the traditional strategy. Economic order quantity is also smaller than that of the traditional strategy. These results indicate that agri-food products can be transported quickly and freshly under direct delivery strategy. Consequently, considering carbon emissions, direct delivery logistics strategy are analyzed to have more positive effect on economic and environmental issues than existing logistics strategy. It is judged that direct strategy will also increase the freshness of agricultural products.
Keywords
Agri-food logistics; Carbon Emission; Direct Delivery Logistics Strategy; EOQ; Operation Costs;
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