Considering both Environmental Impact and Economic Costs in the Optimization of the Tactical Planning for the Fast Moving Consumer Goods Industry

In this paper, the environmental impact of operating a supply chain of a Fast Moving Consumer Goods (FMCG) company over a one year horizon is considered. The environmental impact is evaluated using the Ecoindicator 99. In the optimization of the tactical planning decisions both this environmental objective and the total costs are considered using the ε-constraint method for identifying a set of Pareto-optimal solutions. For a case study containing 10 Stock-Keeping Units (SKUs), which was optimized with a 1% optimality tolerance, the environmental impact could be reduced by 2.9% without increasing the total costs. A further reduction of environmental impact of up to 6.3% was possible at an increase in total costs of 5.2%. An SKU decomposition algorithm was applied to optimize a larger case study containing 100 SKUs.