Safety Stock Placement Optimization In Multi-echelon Supply Chains With Carbon Emission Trading Scheme

The excessive use of fossil fuels such as coal,oil and natural gas has resulted in the massive emission of greenhouse gases such as CO₂,and the resulting greenhouse effect has become a common concern of the whole society.In recent years,many countries have introduced some policies to limit the carbon emission level of economic entities,which poses new challenges for the development of enterprises.The carbon emissions trading scheme would allow carbon emission rights as a commodity or resource to circulate in the market.Therefore,enterprises must consider the cost of carbon emission.Our government has launched the national carbon emission trading market in 2017,so the low-carbon development of various industries in the future is an inevitable trend.Under the background of economic globalization,the competition between traditional enterprises gradually transformed into competition between supply chains,which requires close collaboration between supply chain members to realize low carbon development,increase the overall competitive advantage.Under the mechanism of carbon emission trading,how to trade-off between the safety stock and carbon emissions in supply chains is a key problem in our research.To solve this problem,we made the following efforts:First of all,we sort out the existing literature about the placement of multi-echelon supply chain safety stock problem,then discuss the research background and assumptions of it.Secondly,we introduce the concept of carbon emission trading mechanism,and combined carbon emissions with a multi-echelon supply chain safety stock problem,then analyze the carbon emission function in supply chains.After that,we construct an optimization model of the placement of the safety stock in multi-echelon supply chains under the carbon emission trading mechanism,and then conduct linear transformation to give an iterative algorithm.Then,we conduct lots of numerical experiments,which validate the effectiveness of the algorithm;we also discuss how the carbon cap,carbon price,and service response time influence the performance of the supply chain system,which provides us with some managerial implications.In the end,we make a summary and provide reference for further study in this field.