Inventory management is a topic that has captured the attention of the academic and business communities for a long time. One of the most important points investigated by academics and practitioners for decades is economic order quantity (EOQ) selection. As the name suggests, EOQ is the order quantity that minimizes the total inventory cost. Despite the numerous variations of the EOQ that have appeared in the literature to adapt it to reality, it still has limitations. A major one is that it doesn't take into account the hidden costs inherent in inventory systems. Some of these costs relate to sustainability issues, including environmental, social and economic effects. This research proposal considers some of these costs, called exergy costs, and estimates them using the Extended Exergy Accounting, EEA, approach. Extended exergy accounting assigns equivalent exergetic values to a system's capital, labor, and environmental cleanup costs. The analysis combines classical exergy analysis with sustainability factors, which are environment, labor and capital. To make this proposal enjoyable for readers and help them grasp the idea we would like to introduce, this proposal is organized as follows: Section 2 presents the most important literature review related to the topic of this proposal. Section 3 introduces supply chain management, including a brief background and definition of supply chain management, objectives and benefits. Then we followed Green Supply Chain Management and Sustainable SCM respectively. In Section 4, we introduced the term “Exergy” and how to relate it to sustainability and inventory management. It was followed by Exergetic Analysis and……paper……s” a set of approaches used to efficiently integrate suppliers, manufacturers, warehouses and stores, so that goods are produced and distributed in the right quantities, in right locations and at the right time, in order to minimize system-level costs while meeting service level requirements” (Simchi-Levi, et al 2004, p1).5.1 What are the objectives of SCM? The main goal of SCM is to increase the profitability of all members and reduce their total cost. This task can be achieved by modifying and controlling all policies related to pricing, optimal quantity ordering and inventory management. Therefore, the most important task of SCM is to increase inventory turnover by selling products faster, which will improve cash flow. As a result, return on capital will improve and pressure on working capital will reduce.
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