Investigating Carbon Emissions in a Single-Manufacturer Multi-Retailer System with Stochastic Demand and Hybrid Production Facilities

This paper presents a mathematical model to investigate carbon emissions reduction in a supply chain system comprising a manufacturer and multiple retailers. The demand at the retailer side follows a normal distribution, and the lead time is variable. The proposed model considered emissions arising from production, storage, and transportation. To comply with the carbon tax regulation imposed by the government, the manufacturer operates a hybrid production system composed of two facilities, where one of them adopts a green technology. The objective of the model is to determine the allocation factor, the number of shipments, safety factor, shipment lot, and production rate that minimize the joint total cost. An efficient algorithm is also proposed to obtain the solutions. Some numerical examples are provided to illustrate the application of the model and to compare the model with the one with an identical lead time. Sensitivity analysis is finally carried out to study how the model behaves against the changes in some key parameters. The results obtained indicate that green production facilities in the manufacturing system have proven to offer significant benefits, especially in reducing emissions. In addition, the emissions from the manufacturer can be managed by adjusting the production rate and allocation factor. The emissions from the retailers can be managed by controlling the shipment lot, the number of deliveries, and the safety factor. Finally, the proposed model performs better in increasing economic and environmental performances of the supply chain system compared to the model with an identical lead time.