The Impact of Emissions on Lot Sizing Decisions in Multi-Facility Network under Congestion

摘要

There has been a growing focus on the environmental impact of supply chain operations which led to significant efforts in limiting the greenhouse gas emissions. This implies that firms need to incorporate the environmental effects into their decision making process. In this paper, we develop a multi-period demand allocation model for a multiple facility network where the cost of production, holding, and transportation is minimized while taking into account the environmental impacts. To this end, we consider a limit on the total carbon emission (Carbon Cap) associated with producing and distributing commodities to a set of geographically dispersed customer locations. We consider the emissions associated with production facilities and transportation while considering the congestion effects at the facilities. In order to represent congestion effects, the production facility network is modeled as a spatially distributed M/G/1 queuing network, which leads to a nonlinear multi-period mixed integer programming formulation. We present a cutting plane algorithm based exact solution approach. We analyze the impact of facility and transportation related emissions on demand allocation and lot sizing decisions.