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Investing in carbon emissions reduction in the EOQ model

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  • Jun-Yeon Lee

Abstract

Investment in carbon emissions reduction is an important decision for many firms due to climate change and growing pressures from various stakeholders. In this paper, we examine the problem of jointly determining optimal order quantity and investment in carbon emissions reduction in the EOQ model with a cap-and-price regulation policy, in which the firm is penalised (rewarded) if its carbon footprint is larger (smaller) than a threshold. Cap-and-trade, carbon tax, cap-and-offset, and carbon cap can be viewed as special cases of the cap-and-price policy. The investment reduces the carbons emitted per replenishment and per unit produced. We characterise the optimal solutions and compare different regulations in terms of the firm’s annual total cost and carbon footprint.

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  • Jun-Yeon Lee, 2020. "Investing in carbon emissions reduction in the EOQ model," Journal of the Operational Research Society, Taylor & Francis Journals, vol. 71(8), pages 1289-1300, August.
    • Handle: RePEc:taf:tjorxx:v:71:y:2020:i:8:p:1289-1300
    DOI: 10.1080/01605682.2019.1609889
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    Cited by:

    1. Ata Allah Taleizadeh & Leila Aliabadi & Park Thaichon, 2022. "A sustainable inventory system with price-sensitive demand and carbon emissions under partial trade credit and partial backordering," Operational Research, Springer, vol. 22(4), pages 4471-4516, September.
    2. Chenglin Hu & Junsong Bian & Kin-Keung Lai, 2023. "Joint Optimal Production Planning in Supply Chains under Diverse Low-Carbon Policies," Mathematics, MDPI, vol. 11(15), pages 1-22, August.
    3. Fu, Ke & Li, Yanzhi & Mao, Huiqiang & Miao, Zhaowei, 2023. "Firms’ production and green technology strategies: The role of emission asymmetry and carbon taxes," European Journal of Operational Research, Elsevier, vol. 305(3), pages 1100-1112.

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