Impact of the inclusion of variable CO2 cost in the distribution network design

Abstract

Paper aims: This study aims to evaluate the economic-financial impact that the inclusion of environmental variable CO2 cost attributed to transportation (fuel consumption) and manufacturing activities (electricity consumption) represents in a distribution network optimization design. Originality: This is the first work carried out in Brazil to present a feasible eco-efficient distribution network in the technical and economic aspects considering the tax aspects of ICMS. In addition, this work addresses the inclusion of CO2 as a cost associated with transportation and manufacturing activities. Finally, for the first time in literature, a reference framework that considers environmental variables is presented. Research method: This study used the systematic literature review method to review the referential framework and carried out a cost reduction using specialist optimization software. Main findings: The technical and economical feasibility in achieving reduction of both total logistic and CO2 costs in a distribution network design in Brazil and the inexistence of trade-offs without technical solution to the eco-efficient configuration of the distribution network. Implications for theory and practice: The results of this paper presents a relevant contribution to logistics professionals and researchers, as it was able to present a framework and demonstrated the feasibility of an eco-efficient network design.