Trade-off between service time and carbon emissions for safety stock placement in multi-echelon supply chains

Abstract

With the low-carbon revolution, many firms face the continuous challenge for reducing carbon emissions in their supply chain activities. Built upon the strategic safety stock placement model, in this paper, we model the carbon emissions for each stage of a multi-echelon supply chain as a function of the service time guaranteed by this stage to its immediate downstream stages. We establish that there is a negative correlation between service time and carbon emissions at each stage. Based on this, we develop two models to study the trade-off between service time and carbon emissions for safety stock placement in multi-echelon supply chains by considering carbon cap and carbon tax, respectively. Both of them are solved using iterative piecewise linear approximations. We implement these two models to study how carbon cap, carbon emission cost rate and guaranteed service time affect the optimal safety stock placement using a real chain.

The Design of Green Supply Chains under Carbon Policies: A Literature Review of Quantitative Models

“…With a lower carbon tax, it is difficult to achieve higher emission reduction [39]. With the cap-and-trade, however, carbon credits available in the market [75,92,94] and among the SC partners [6,80] can help in achieving more economic benefits [6] and emissions reductions. Some studies on subsidy and carbon offset policies are also available.…”

“…Research is usually focused on the linear relationship between variables and the goals of the model, specifically for operational decisions like inventory level given in [75] and transportation mode given in [81]. Li, et al [82] mention another impact, a change in product configuration due to carbon policies.…”

“…Ni and Shu [75] use mixed integer non-linear programming (MINLP) model to analyze carbon emissions and service time trade-off under the carbon cap and carbon tax policies. Their study reveals that under carbon policies, the cost of the SC becomes lower when there is a larger safety stock holding capacity.…”

“…Martí, Tancrez and Seifert [76] mention that the optimal network structure for the carbon tax and carbon cap policies are similar. However, if the service time constraint is considered, the carbon tax policy may have more effect in the SC design [75].…”

Multi-Objective Optimization Model of Emergency Organization Allocation for Sustainable Disaster Supply Chain

“…Thirdly, energy-consumed in unit is always directly or indirectly related to distance, time and others [35]. To a large extent, other dimensions are able to be replaced by time through some transformations [36,37]. Fourthly, as ETs that represents a set of sub-tasks are identified from a coarse-grained viewpoint, an average value could be used here.…”