Supply Chain Coordination with Energy Price Uncertainty, Carbon Emission Cost, and Product Return

Satya Paul, M. I. M. Wahab () and X. F. Cao ()
Additional contact information
M. I. M. Wahab: Ryerson University
X. F. Cao: Ryerson University

A chapter in Handbook of EOQ Inventory Problems, 2014, pp 179-199 from Springer

Abstract: Abstract An EOQ model for a coordinated two-level supply chain is developed under energy (gasoline) price uncertainty and defective items in transhipment. It is assumed that the transportation cost not only depends on the lot size, but also depends on the gasoline price uncertainty. The purpose is to determine the optimal production–shipment policy for the proposed model by taking into account the percentage of defective items, transportation cost, setup cost, screening cost, holding cost, and carbon emission cost. The objective is to determine the optimal number of shipments and the optimal order quantity that minimize the expected total cost per unit time. Expressions for the optimal order quantity, the optimal number of shipments, the optimal number of buyer’s cycle during which the defective items are stored at the buyer’s warehouse before shipping them to the vendor are derived by minimizing the expected total cost per unit time. In order to illustrate the proposed model, a numerical example is presented and results are discussed. It is found that as the gasoline price uncertainty increases, both the total cost and shipment size increase. This shows that the gasoline price influences the supply chain coordination. Moreover, when the fixed gasoline consumption depending on the vehicle size, type, or age increases, shipment size increases, the number of shipments decreases, and the total cost increases. This implies that when the truck size or type used for shipping changes, the supply chain coordination decision will also change. The variable gasoline consumption increases the total cost of the supply chain. Finally, a similar behavior is observed with respect to fixed and variable carbon emissions costs for the buyer.

Keywords: Supply Chain; Carbon Emission; Transportation Cost; Order Quantity; Setup Cost (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (1)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:isochp:978-1-4614-7639-9_9

Ordering information: This item can be ordered from
http://www.springer.com/9781461476399

DOI: 10.1007/978-1-4614-7639-9_9

Access Statistics for this chapter

More chapters in International Series in Operations Research & Management Science from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().