###### Abstract  
This research employs numerical simulations and scenario analysis to assess a supply chain model's economic and environmental performance operating under stochastic market demand, with inventory levels managed by a periodic review (R, s, S) inventory system. The inventory model in this research is designed to determine the minimal inventory levels required to achieve predefined fill rates across various operational constraints. The supply chain's inventory model simulates optimal responses to normally distributed market demand within 365-day periods characterized by mean and two levels of demand variability through two fill rate levels, two workweek schedules, 15 review periods, and 16 lead times. By conducting an extensive analysis of the 192000 simulation experiments of the supply chain under periodic review (R, s, S) inventory system, complex influences between system variables and economic outcomes of supply chain operation measured by ordering, transportation, holding, penalty, and total costs along with greenhouse gas emissions arising from inventory-related transportation according to the ISO 14083 standard are analyzed. The insights from this research have significant practical implications, providing valuable guidance for supply chain managers, researchers, and freight companies offering guidance for improving economic and environmental performance. green inventory management; periodic review inventory system; simulation modeling; ISO 14083; inventory-related costs; greenhouse gas emissions; supply chain; non-working day +
Footnote †: journal: Applied Sciences  
1 Faculty of Mechanical Engineering and Naval Architecture, University of Zagreb, [PERSON] 5, 10002 Zagreb, Croatia; [EMAIL_ADDRESS]
economic and environmental performance. This paper evaluates the influence of inventory control within an SC echelon on its environmental and cost performance, aiming to detect the opportunities to reduce costs and greenhouse gas (GHG) emissions due to operational decisions. As confirmed by the work of [5], there is an evident study gap in papers that simultaneously tackle these topics, and our research aims to contribute in that direction. Supply chain activities, including production, transportation, and inventory management, significantly contribute to GHG emissions, which is why this sector has become a primary focus for researchers seeking methods to reduce emissions [6]. The environmental impact analyzed in this work concerns GHG emissions from road freight transportation related to inventory replenishment in the SC. Operational adjustments and efficient inventory control are recognized as efficient ways for emission reduction without investments in new technologies [7; 8; 9]. Identification of such possibilities is among this paper's objectives, which aligns with European Union environmental policy targets for 2030, requiring at least 55% GHG emissions reduction compared to the 1990 levels to achieve climate neutrality by 2050 [10]. As [11] points out, 23% of the emissions originate from the transport sector, including passenger transport, with approximately 8-10% coming from freight transport. According to the European Commission's analysis [12], inventory data indicate an annual reduction of 4 MtCO2e from 2005 to 2021. However, this rate is inadequate to achieve the EU 2030 target. Over the past three decades, notable emission reductions have been achieved in various sectors, such as the energy industry, particularly in electricity and heat production, emissions from fuel combustion in manufacturing and construction, and the chemical and metal industry. In contrast, emissions in the transport sector have risen, especially in road transportation, which increased by 16%, though a slight decline in the past ten years is noticed. The need for a unified methodological framework to account for emissions from transport services and standardize emissions measurement across various industries is globally recognized.