IDEAS home Printed from https://ideas.repec.org/a/gam/jlogis/v7y2023i1p16-d1096607.html
   My bibliography  Save this article

Production Inventory Optimization Considering Direct and Indirect Carbon Emissions under a Cap-and-Trade Regulation

Author

Listed:
  • Yosef Daryanto

    (Department of Industrial Engineering, Universitas Atma Jaya Yogyakarta, Yogyakarta 55281, Indonesia)

  • Djoko Setyanto

    (Department of Professional Engineer Certification, Faculty of Engineering, Atma Jaya Catholic University of Indonesia, Jakarta 12930, Indonesia)

Abstract

Background : The latest global agreement on net-zero emissions encourages new studies on production inventory optimization that promote carbon emissions reduction without harming a company’s profit performance, particularly because certain carbon-pricing regulations bind manufacturing companies. Methods : This study aims to develop a production inventory model that considers direct and indirect emissions in three emission scopes. It incorporates emissions from production, material handling, transportation, and waste disposal for further treatment under a carbon cap-and-trade regulation. With the help of Maple software, a convex total cost function was solved. Results : The results show that the optimum production quantity depends on the values of demand, setup cost, holding cost, fixed cost per delivery, fixed cost for waste disposal, and other parameters related to carbon prices. This study also found that the total cost was highly dependent on the values of the carbon cap, carbon price, and delivery distance. Meanwhile, changes in the delivery distance and fuel emissions standard significantly impacted total emissions. Conclusions : The proposed model can guide manufacturing companies in setting the optimum production quantity per cycle. Moreover, they must carefully manage the delivery and setting of the carbon cap and carbon price from the government.

Suggested Citation

  • Yosef Daryanto & Djoko Setyanto, 2023. "Production Inventory Optimization Considering Direct and Indirect Carbon Emissions under a Cap-and-Trade Regulation," Logistics, MDPI, vol. 7(1), pages 1-18, March.
    • Handle: RePEc:gam:jlogis:v:7:y:2023:i:1:p:16-:d:1096607
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2305-6290/7/1/16/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2305-6290/7/1/16/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rubayet Karim & Koichi Nakade, 2022. "A Literature Review on the Sustainable EPQ Model, Focusing on Carbon Emissions and Product Recycling," Logistics, MDPI, vol. 6(3), pages 1-16, August.
    2. Priyamvada & Prerna Gautam & Aditi Khanna, 2021. "Sustainable production strategies for deteriorating and imperfect quality items with an investment in preservation technology," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 12(5), pages 910-918, October.
    3. YuJan Shen & KuanFu Shen & ChihTe Yang, 2019. "A Production Inventory Model for Deteriorating Items with Collaborative Preservation Technology Investment Under Carbon Tax," Sustainability, MDPI, vol. 11(18), pages 1-18, September.
    4. Angappa Gunasekaran & Zahir Irani & Thanos Papadopoulos, 2014. "Modelling and analysis of sustainable operations management: certain investigations for research and applications," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 65(6), pages 806-823, June.
    5. Noura Yassine, 2020. "A sustainable economic production model: effects of quality and emissions tax from transportation," Annals of Operations Research, Springer, vol. 290(1), pages 73-94, July.
    6. Tapan Kumar Datta, 2017. "Effect of Green Technology Investment on a Production-Inventory System with Carbon Tax," Advances in Operations Research, Hindawi, vol. 2017, pages 1-12, December.
    7. Sathaye, Nakul & Horvath, Arpad & Madanat, Samer, 2010. "Unintended impacts of increased truck loads on pavement supply-chain emissions," Transportation Research Part A: Policy and Practice, Elsevier, vol. 44(1), pages 1-15, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Suchitra Pattnaik & Mitali Madhusmita Nayak & Stefano Abbate & Piera Centobelli, 2021. "Recent Trends in Sustainable Inventory Models: A Literature Review," Sustainability, MDPI, vol. 13(21), pages 1-20, October.
    2. Jia-Liang Pan & Chui-Yu Chiu & Kun-Shan Wu & Chih-Te Yang & Yen-Wen Wang, 2021. "Optimal Pricing, Advertising, Production, Inventory and Investing Policies in a Multi-Stage Sustainable Supply Chain," Energies, MDPI, vol. 14(22), pages 1-20, November.
    3. Dharmendra Yadav & Umesh Chand & Ruchi Goel & Biswajit Sarkar, 2023. "Smart Production System with Random Imperfect Process, Partial Backordering, and Deterioration in an Inflationary Environment," Mathematics, MDPI, vol. 11(2), pages 1-20, January.
    4. Raeesi, Ramin & Sahebjamnia, Navid & Mansouri, S. Afshin, 2023. "The synergistic effect of operational research and big data analytics in greening container terminal operations: A review and future directions," European Journal of Operational Research, Elsevier, vol. 310(3), pages 943-973.
    5. Daryanto, Yosef & Wee, Hui Ming & Astanti, Ririn Diar, 2019. "Three-echelon supply chain model considering carbon emission and item deterioration," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 122(C), pages 368-383.
    6. Kannan Govindan, 2022. "Tunneling the barriers of blockchain technology in remanufacturing for achieving sustainable development goals: A circular manufacturing perspective," Business Strategy and the Environment, Wiley Blackwell, vol. 31(8), pages 3769-3785, December.
    7. Sathaye, Nakul & Madanat, Samer, 2012. "A bottom-up optimal pavement resurfacing solution approach for large-scale networks," Transportation Research Part B: Methodological, Elsevier, vol. 46(4), pages 520-528.
    8. Sathaye, Nakul & Madanat, Samer, 2011. "A bottom-up solution for the multi-facility optimal pavement resurfacing problem," Transportation Research Part B: Methodological, Elsevier, vol. 45(7), pages 1004-1017, August.
    9. Ana Beatriz Lopes de Sousa Jabbour & Charbel Jose Chiappetta Jabbour & Moacir Godinho Filho & David Roubaud, 2018. "Industry 4.0 and the circular economy: a proposed research agenda and original roadmap for sustainable operations," Annals of Operations Research, Springer, vol. 270(1), pages 273-286, November.
    10. Shivam Gupta & Nezih Altay & Zongwei Luo, 2019. "Big data in humanitarian supply chain management: a review and further research directions," Annals of Operations Research, Springer, vol. 283(1), pages 1153-1173, December.
    11. Rubayet Karim & Koichi Nakade, 2022. "A Literature Review on the Sustainable EPQ Model, Focusing on Carbon Emissions and Product Recycling," Logistics, MDPI, vol. 6(3), pages 1-16, August.
    12. De Borger, Bruno & Mulalic, Ismir, 2012. "The determinants of fuel use in the trucking industry—volume, fleet characteristics and the rebound effect," Transport Policy, Elsevier, vol. 24(C), pages 284-295.
    13. Nabajyoti Bhattacharjee & Nabendu Sen, 2022. "A sustainable production inventory model for profit maximization under optimum raw material input rate during production," OPSEARCH, Springer;Operational Research Society of India, vol. 59(2), pages 667-693, June.
    14. Nabajyoti Bhattacharjee & Nabendu Sen, 2021. "An inventory model to study the effect of the probabilistic rate of carbon emission on the profit earned by a supplier," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 31(4), pages 5-33.
    15. Sathaye, Nakul & Harley, Robert & Madanat, Samer, 2010. "Unintended environmental impacts of nighttime freight logistics activities," Transportation Research Part A: Policy and Practice, Elsevier, vol. 44(8), pages 642-659, October.
    16. Tapan Kumar Datta & Prasanta Nath & Karabi Dutta Choudhury, 2020. "A hybrid carbon policy inventory model with emission source-based green investments," OPSEARCH, Springer;Operational Research Society of India, vol. 57(1), pages 202-220, March.
    17. de Sousa Jabbour, Ana Beatriz Lopes & Jabbour, Charbel Jose Chiappetta & Foropon, Cyril & Godinho Filho, Moacir, 2018. "When titans meet – Can industry 4.0 revolutionise the environmentally-sustainable manufacturing wave? The role of critical success factors," Technological Forecasting and Social Change, Elsevier, vol. 132(C), pages 18-25.
    18. Mukunda Choudhury & Sujit Kumar De & Gour Chandra Mahata, 2023. "A pollution-sensitive multistage production-inventory model for deteriorating items considering expiration date under Stackelberg game approach," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(10), pages 11847-11884, October.
    19. Ajoy Hatibaruah & Sumit Saha, 2023. "An inventory model for two-parameter Weibull distributed ameliorating and deteriorating items with stock and advertisement frequency dependent demand under trade credit and preservation technology," OPSEARCH, Springer;Operational Research Society of India, vol. 60(2), pages 951-1002, June.
    20. Gatta, Valerio & Marcucci, Edoardo, 2014. "Urban freight transport and policy changes: Improving decision makers' awareness via an agent-specific approach," Transport Policy, Elsevier, vol. 36(C), pages 248-252.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jlogis:v:7:y:2023:i:1:p:16-:d:1096607. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.