Tactical supply chain planning under a carbon tax policy scheme: A case study

Behnam Fahimnia*, Joseph Sarkis, Alok Choudhary, Ali Eshragh

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

76 Citations (Scopus)

Abstract

Greenhouse gas emissions are receiving greater scrutiny in many countries due to international forces to reduce anthropogenic global climate change. Industry and their supply chains represent a major source of these emissions. This paper presents a tactical supply chain planning model that integrates economic and carbon emission objectives under a carbon tax policy scheme. A modified Cross-Entropy solution method is adopted to solve the proposed nonlinear supply chain planning model. Numerical experiments are completed utilizing data from an actual organization in Australia where a carbon tax is in operation. The analyses of the numerical results provide important organizational and policy insights on (1) the financial and emissions reduction impacts of a carbon tax at the tactical planning level, (2) the use of cost/emission tradeoff analysis for making informed decisions on investments, (3) the way to price carbon for maximum environmental returns per dollar increase in supply chain cost.

Original languageEnglish
Peer-reviewed scientific journalInternational Journal of Production Economics
Volume164
Issue numberJune
Pages (from-to)206-215
Number of pages10
ISSN0925-5273
DOIs
Publication statusPublished - 18.12.2014
MoE publication typeA1 Journal article - refereed

Keywords

  • 512 Business and Management
  • Green supply chain
  • Environmental sustainability
  • Carbon tax policy scheme
  • Carbon pricing
  • Cap-and-trade market
  • Carbon trading
  • Nested
  • Integrated Cross-Entropy

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