EOQ-type inventory models incorporating discount policies and carbon emission with warehouse capacity and capital constraints

In 2019, Kristiyani and Daryanto proposed an EOQ-type inventory model which takes into account the company's total carbon emission, and assumes that the item's purchase obeys the all-unit-discount policy. In this paper, we construct a modification of the model, by replacing the all-unit-discount policy with the incremental-discount policy. Furthermore, we complement both models with warehouse capacity and capital constraints. Using both models, we compute numerically the optimal order quantity satisfying both constraints, in the scenario of a building materials company in Bandung, Indonesia. At the obtained optimal state, we analyse the sensitivity of both the company's total cost and total carbon emission with respect to some of the models' parameters. The results show that both quantities depend particularly significantly on the fuel consumption of the vehicle used to transport the purchased items from the supplier to the company's warehouse.