Adjust or invest : what is the best option to green a supply chain?

Abstract

Greening a supply chain can be achieved by considering several options. However, companies lack of clear guidelines to assess and compare these options. In this paper, we propose to use multiobjective optimization to assess operational adjustment and technology investment options in terms of cost and carbon emissions. Our study is based on a multiobjective formulation of the economic order quantity model called the sustainable order quantity model. The results show that both options may be effective to lower the impacts of logistics operations. We also provide analytical conditions under which an option outperforms the other one for two classical decision rules, i.e. the carbon cap and the carbon tax cases. The results allow deriving some interesting and potentially impacting practical insight

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