A Cost-Effective Approach for Inventory- Transportation to Address Carbon Tax Policy

The growing concern regarding global warming has resulted in the implementation of regulations aimed at progressively diminishing the volume of greenhouse gases released by industrial sectors and their associated supply chains. This research study concentrates on quantifying the carbon emissions within a two-tiered supply chain, in which a single supplier distributes a single product to different retailers, while also coordinating the many elements of the chain including transportation and inventory. A mixed integer programming (MIP) approach has been developed to attain this goal. This model considers decisions such as the time and quantity of replenishment for each retailer, the types of transportation vehicles employed, and the number of products transported by each vehicle. The goal of this optimization model is not only a reduction in transportation expenses and inventory management costs but also carbon emissions across the supply chain which can be reduced by regarding tax as a leverage.