Non-stationary stochastic inventory lot-sizing with emission and service level constraints in a carbon cap-and-trade system


Firms worldwide are taking major initiatives to reduce the carbon footprint of their supply chains in response to the growing governmental and consumer pressures. In real life, these supply chains face stochastic and non-stationary demand but most of the studies on inventory lot-sizing problem with emission concerns consider deterministic demand. In this paper, we study the inventory lot-sizing problem under non-stationary stochastic demand condition with emission and cycle service level constraints considering carbon cap-and-trade regulatory mechanism. Using a mixed integer linear programming model, this paper aims to investigate the effects of emission parameters, product- and system-related features on the supply chain performance through extensive computational experiments to cover general type business settings and not a specific scenario. Results show that cycle service level and demand coefficient of variation have significant impacts on total cost and emission irrespective of level of demand variability while the impact of product's demand pattern is significant only at lower level of demand variability. Finally, results also show that increasing value of carbon price reduces total cost, total emission and total inventory and the scope of emission reduction by increasing carbon price is greater at higher levels of cycle service level and demand coefficient of variation. The analysis of results helps supply chain managers to take right decision in different demand and service level situations.

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Divisions: College of Business and Social Sciences > Aston Business School > Operations & Information Management
College of Business and Social Sciences > Aston Business School > Aston India Foundation for Applied Research
College of Business and Social Sciences > Aston Business School
Uncontrolled Keywords: carbon emission,lot-sizing,non-stationary stochastic demand,cycle service level,carbon cap-and-trade system,Industrial and Manufacturing Engineering,Renewable Energy, Sustainability and the Environment,General Environmental Science,Strategy and Management
Publication ISSN: 1879-1786
Last Modified: 22 Jul 2024 07:08
Date Deposited: 24 Nov 2015 13:00
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Related URLs: http://www.scop ... tnerID=8YFLogxK (Scopus URL)
PURE Output Type: Article
Published Date: 2016-02-01
Published Online Date: 2015-11-19
Accepted Date: 2015-11-01
Submitted Date: 2015-03-31
Authors: Kumar Purohit, Arun
Shankar, Ravi
Dey, Prasanta K. (ORCID Profile 0000-0002-9984-5374)
Choudhary, Devendra

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