Managing carbon footprints in inventory management

Guowei Hua, Edwin Tai Chiu Cheng, Shouyang Wang

Research output: Journal article publicationJournal articleAcademic researchpeer-review

452 Citations (Scopus)

Abstract

There is a broad consensus that mankind must reduce carbon emissions to mitigate global warming. It is generally accepted that carbon emission trading is one of the most effective market-based mechanisms to curb the amount of carbon emissions. This paper investigates how firms manage carbon footprints in inventory management under the carbon emission trading mechanism. We derive the optimal order quantity, and analytically and numerically examine the impacts of carbon trade, carbon price, and carbon cap on order decisions, carbon emissions, and total cost. We make interesting observations from the numerical examples and provide managerial insights from the analytical results.
Original languageEnglish
Pages (from-to)178-185
Number of pages8
JournalInternational Journal of Production Economics
Volume132
Issue number2
DOIs
Publication statusPublished - 1 Aug 2011

Keywords

  • Carbon emission trading
  • Carbon footprints
  • Inventory
  • Order quantity

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

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