Industry 4.0 Strategy to Reduce the Effect of CO \(_2\) Emissions in Inventory Management Costs

Transportation is crucial for the appropriate flow of products throughout the supply chain. However, the associated emission of pollutants has negative effects on social and environmental welfare. Hence, a multi-factorial strategy is required to accomplish an effective trade-off between transportation, inventory supply frequency and CO \(_2\) emission. In this case, the integration of Industry 4.0 technologies can address the complexity of this task. The present work studies the effect of CO \(_2\) emissions on inventory supply frequency and operational costs. Then, through a case study with uncertain demand, the use of Industry 4.0 technologies is addressed to reduce emissions and costs. The analysis determined that reduction in transportation-associated CO \(_2\) emissions can lead to a reduction in order frequency. Also, Industry 4.0 technologies can have a positive impact in the reduction of stock-out risks and safety stock costs.