Analysis of Carbon Emission Regulations in Supply Chains with Volatile Demand-University of Missouri – St. Louis

Missouri University System, Inter-campus Inter-disciplinary research program

James Campbell
Professor
University of Missouri – St. Louis
206 Engineering Management, 600 W. 14th Street
College of Business Administration, One University Blvd.
St. Louis, MO, 63121
314-516-6125
campbell@umsl.edu

There will be a .50 GTE graduate student at the Engineering Management and Systems Engineering department at Missouri University of Science and Technology working under this project. This student will be studying towards his/her Ph.D. or Master’s degree in the Engineering Management and Systems Engineering Department.

The objective of this research is to evaluate the impact of carbon emission regulations on supply chains with volatile demand. Supply chain operations such as inventory holding, freight transportation, logistics, and warehousing activities are major contributors to emissions for manufacturing, retailing, transportation, health, and service industries. Therefore, it is crucial that supply chain agents plan their operations with environmental considerations. Recently, several forms of carbon emission regulations have been proposed and/or implemented to reduce emissions.

This research will model and solve a supply chain agent’s operations planning problem under two wellknown carbon regulations: carbon-taxing and carbon-cap-and-trade. The growing literature on “green” supply chains and emissions is nearly exclusively focused on settings with deterministic demand. To better capture practical aspects of supply chains/logistics, our research will formulate an integrated inventory control and transportation model with stochastic demand under the  aforementioned carbon regulations. This model will be solved using engineering management/operations research concepts.

This project will provide decision-making algorithms to help supply chain agents better manage inventory and transportation in light of economic and environmental pressures in the presence of demand volatility.
The theoretical modeling and sensitivity analysis will be complimented with a pilot case study using a Missouri firm.

Relationship to other Research/Projects

This is a stand alone project.

Transportation-Related Keywords

Technology Transfer Activities

• The output of this project will be submitted to high quality transportation and environmental planning journals for publication

• The findings in this project will be presented in national conferences

• The findings in this project will be presented in the Annual CIES conference

Project Deliverables

• Theoretical models of, and optimum solution algorithms for, a supply chain agent’s inventory control and transportation planning problems with demand volatility under carbon-taxing and carbon-­cap-­and-trade policies.
• Detailed analyses  of the effects of demand volatility on supply chain  costs and carbon emissions for the two carbon emissions      regulation policies. Key outcomes are changes in the level of carbon  emissions and total supply chain costs.
• A  pilot case study with a Missouri firm to illustrate the application of  the theoretical models and to document the impacts and       tradeoffs for a typical supply chain. This will also help identify practical aspects useful to include in future modeling.

Anticipated Benefits

This project will provide decision-making algorithms to help supply chain
agents better manage inventory and transportation in light of economic and environmental pressures in the presence of demand volatility.

Milestones