EURO 2024 Copenhagen
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3100. Optimization of supply chain planning considering fair carbon emissions reduction and profit distributions

Invited abstract in session WA-24: Sustainable Supply Chain Management, stream Sustainable Supply Chains.

Wednesday, 8:30-10:00
Room: 83 (building: 116)

Authors (first author is the speaker)

1. Chang Lyu
School of Management, Harbin Institute of Technology
2. Songsong Liu
School of Management, Harbin Institute of Technology

Abstract

Facing the global challenge on climate change, how to maintain economic growth with effective carbon emissions reduction, has become an important and urgent issue. However, the related studies only focus on the unilateral optimization of total supply chain carbon emissions reduction, which will lead to uneven distribution of carbon emissions reduction among the supply chain members and seriously undermine the stability of the supply chain. To fill this research gap, this study establishes a trading path of carbon quota inside and outside the supply chain, and constructs a mixed integer linear programming (MILP) model for carbon emissions reduction based on the carbon cap-and-trade policy considering dual fairness. The production, distribution and capacity planning strategies, as well as carbon trading decisions, of all supply chain members are optimized. Using the Nash bargaining method and the ɛ-constraint method, the carbon emissions reduction and profit of each supply chain member can be fairly distributed. A industrial case based numerical example is introduced to demonstrate the applicability and effectiveness of the proposed model and solution method. The results show that Nash bargaining method could lead to a fair distribution of profit and carbon emissions reduction. In addition, when some members have insufficient carbon emissions allowance, the cap-sharing mechanism plays a better role in fair coordination.

Keywords

Status: accepted

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