**4. Analysis of the Impact of Operational Flexibility on Excess Inventory**

We now look at the impact of the three operational-flexibility strategies (i.e., lead-time reduction, quantity flexibility, and multiple sourcing) on the excess inventory in order to quantify the environmental benefits of operational flexibility. The analytical derivations of the optimal policies for these strategies are given in detail in de Treville et al. [8] for lead-time reduction, Bicer and Hagspiel [10] for quantity-flexibility contracts, and Biçer [9] for multiple sourcing. The following subsections first discuss the analytical derivations of the optimal policies for these strategies and then quantify the impact of operational flexibility on excess inventory.
