The impact of co-location in emissions regulation clusters on traditional and vendor managed supply chain inventory decisions

Nazli Turken (), Avinash Geda () and Venkanna Dora Goutham Takasi ()
Additional contact information
Nazli Turken: Johns Hopkins University
Avinash Geda: University of North Carolina at Wilmington
Venkanna Dora Goutham Takasi: University of Texas, Dallas

Annals of Operations Research, 2025, vol. 349, issue 2, No 19, 980 pages

Abstract: Abstract Most of the works studying the response of supply chains to environmental regulations assume all parties are subjected to the same regulations. However, quite rarely the buyers and vendors are co-located and under the same environmental regulations. In this paper, we study the inventory and production decisions of a buyer and a vendor in a multiple buyers-single vendor supply chain with multiple products under various environmental regulations. Our analysis shows that the multiple buyers-multiple products case simplifies to the single buyer-single product case in certain conditions. We find that while a cap-and-trade regulation on the buyer may increase or decrease the economic order quantity of the buyer in traditional supply chains, it always decreases the economic order quantity of the buyer in vendor managed inventories (VMI). We show that while cap-and-trade regulation induces a reduction in carbon emissions of the buyer in both VMI and traditional supply chains, it may increase the carbon emissions of the vendor. Furthermore, we find that although not as widely used as cap-and-trade regulation, carbon cap regulation may decrease the carbon emissions of the buyer and vendor beyond that of a green buyer or a green vendor. In addition, we prescribe actions that the buyer or vendor may take to offset the effects any changes in parameters have on the economic order/production quantities.

Keywords: Environmental regulations; VMI; Differential importance (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10479-021-03954-z Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:annopr:v:349:y:2025:i:2:d:10.1007_s10479-021-03954-z

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10479

DOI: 10.1007/s10479-021-03954-z

Access Statistics for this article

Annals of Operations Research is currently edited by Endre Boros

More articles in Annals of Operations Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().