The effects of carbon cap limitations on inventory and multimodal transportation

Countries in the world need the right steps to maintain global sustainability. This is because the effects of global warming, as a result of greenhouse gas emissions, have threatened the balance of the Earth's ecosystem. One of the joint commitments that have been made is related to reduce carbon emissions. Practically, this commitment is intended to determine the carbon capacity limitation for each country or company, which is defined as a carbon cap. With this limit, we hope to find the best solution to reduce the amount of carbon emissions while minimizing the total transportation costs and inventory costs. In this study, we developed an inventory management model that integrates land multimodal transportation from multi factories to several customers by considering carbon emission limitation. The two land multimodal transportation used are (a) trucks which transport a product from several factories to stations and from stations to customers and (b) trains from departure stations to arrival stations for long distance shipments. The purpose of this study is to find an optimal solution that considers total costs and carbon emissions. The decision variables of this study are inventories at the factories, as well as the quantities of product deliveries. Numerical experiment results show that carbon cap affects total emissions and total costs for each supply chain activity. We also carried out a sensitivity analysis to find the relationship between decision variables and carbon cap scenarios. By changing the carbon emission limit values, the number of inventories at the factories shows different patterns.