Two Stage Stochastic Green Supply Chain Network Design under Emission Trading Scheme

Abstract

Emission trading is one of the famous mechanisms under Kyoto protocol to control environmental pollution. The aim of this paper is to design a strategic supply chain network under emission trading scheme with inclusion of stochastic parameters and budget limitation. Demand and price of carbon credits are considered as the important stochastic parameters influencing the supply chain network. In doing so, a two-stage stochastic programming model has been presented and solved. Furthermore the effect of change of carbon credit price and budget have been studied and the value of stochastic solution have been calculated. The results show that the inclusion of carbon price affects the supply chain network configuration and use of stochastic programming results in total cost reduction.

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References

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History

  • Receive Date: 28 July 2014
  • Revise Date: 23 August 2014
  • Accept Date: 10 September 2014

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