Policy insights from a green supply chain optimisation model

Abstract

This paper introduces a practical supply chain optimisation model that incorporates both economic and carbon emission objectives. The proposed model is implemented to examine the possible economic and environmental trade-offs for various carbon-pricing and fuel-pricing scenarios in an actual case company representing the discrete, durable parts manufacturing sector. Analysis of the numerical results provides important managerial implications and policy insights. For industry practitioners, the findings can assist in identifying the critical activities along the supply chain on which to focus in order to minimise the cost implications of a carbon-pricing regulation. For related policy-makers, the findings provide insights on how carbon should be priced to make meaningful impacts on emissions reduction while matching variations in fuel prices.