Carbon Constrained Integrated Inventory System with Linear and Quadratic Production and Compound Poisson Demand.

Abstract

This paper develops an two-stage supply chain model with imperfect manufacturing process under variable lead time. The cost of producing a unit of product is calculated as a function of production rate. In addition, linear and quadratic production functions are used to relate the process quality and production rate. This work relaxes the assumption that lead time demand is deterministic and treats it as a compound Poisson process. Also, we characterize the effects of carbon taxation, cap-and-trade and limited carbon emission policies to reduce greenhouse gas emissions. Although the basic purpose cap-and-trade is a reduction in carbon emissions that a well-structured emissions trading system can deliver significantly environmental, economic and social benefits. The energy usage is categorized according to the manufacturing and reworking processes. Under various carbon emission standards, the suggested model determines the appropriate order quantity. A numerical example has been considered to evaluate this model using MATLAB 2014a . Sensitivity analysis section is decorated for the optimal solution of the model with respect to major cost parameters of the system are carried out, and the implications of the analysis are discussed.The results suggest that limited carbon emission policies have a lower total cost than carbon tax policy and cap-and-trade policy.