Managing carbon footprints in inventory management

There is a broad consensus that mankind must reduce carbon emissions to mitigate global warming. It is generally accepted that carbon emission trading is one of the most effective market-based mechanisms to curb the amount of carbon emissions. This paper investigates how firms manage carbon footprin...

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Bibliographic Details
Published in:International journal of production economics 2011-08, Vol.132 (2), p.178-185
Main Authors: Hua, Guowei, Cheng, T.C.E., Wang, Shouyang
Format: Article
Language:English
Subjects:
Carbon
Carbon emission trading
Carbon footprint
Carbon footprints
Economics
Emission
Emission analysis
Emissions trading
Footprints
Impact analysis
Inventory
Inventory Carbon footprints Carbon emission trading Order quantity
Inventory management
Mathematical analysis
Optimization
Order quantity
Studies
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Summary:There is a broad consensus that mankind must reduce carbon emissions to mitigate global warming. It is generally accepted that carbon emission trading is one of the most effective market-based mechanisms to curb the amount of carbon emissions. This paper investigates how firms manage carbon footprints in inventory management under the carbon emission trading mechanism. We derive the optimal order quantity, and analytically and numerically examine the impacts of carbon trade, carbon price, and carbon cap on order decisions, carbon emissions, and total cost. We make interesting observations from the numerical examples and provide managerial insights from the analytical results.
ISSN:0925-5273
1873-7579
DOI:10.1016/j.ijpe.2011.03.024