Order Decision with Random Demand: A Research from the Perspective of Carbon Emission Cap and Carbon Trade Mechanism

Weihua Liu (), Wenchen Xie () and Guowei Hua ()
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Weihua Liu: Tianjin University
Wenchen Xie: Texas A&M University
Guowei Hua: Beijing Jiaotong University

Chapter Chapter 81 in LTLGB 2012, 2013, pp 585-593 from Springer

Abstract: Abstract This paper mainly discusses the impact of carbon emission cap-and-trade mechanism on the order decision-making with random demand. First, considering the random demand, carbon emission cap-and-trade, a single-cycle order model has been established. Then this model is solved and the optimal order quantity is put forward. Many interesting observations which are different from the order decision-making for stable demand are found out. The research shows that: a value range of carbon trading price exists; Carbon cap-and-trade mechanism can motivate the organizations to reduce carbon emission effectively; whether the company should buy carbon credits depends on the actual carbon emission and carbon emission cap; Reducing carbon emission doesn’t necessarily lead to high cost.

Keywords: Low carbon supply chain; Carbon emission cap and carbon trade mechanism; Random demand; Order decision model (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-642-34651-4_81

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DOI: 10.1007/978-3-642-34651-4_81

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