The Optimization And Simulation Of Ordering Strategy For The Supply Chain Under Emission Policies

Global warming has caused more and more attention to low carbon economy. It isbecoming the common goal of both policy-makers and entrepreneurs to develop low-carboneconomy, reduce the emission of greenhouse gases and decrease the cost. The emission ofgreenhouse gases is along with the supply chain including the production, order, storage anddelivery of products. In the contemporary era when we propose low-carbon economy andlow-carbon supply chain, carbon emissions have become a noticeable factor in policy-making.Nevertheless, different role-players in society make decisions from different starting points:the government gives the priority to the least emission of polluted gases and least damage tothe social environment while entrepreneurs would consider more on their benefit-cost. Ingeneral, there may exist conflicts between the balance of benefit-cost and carbon emission.Besides, different carbon-emission policies will cause distinguished effects. Therefore, theanalysis of the effects of different types of carbon-emission policies will provideenlightenment to the optimization of supply chain.This article firstly gives a comprehensive introduction of the joint replenishment at homeand abroad and then introduces carbon-emission policies to the traditional replenishmentsituations. Next, I did example analysis with RAND algorithm and calculated the basicreplenishment periods under different carbon tax policies and period multipliers of differentproducts. We proved that the period would be shortened and purchasing decisions in thedownstream would lead to lower inventory cost due to the decreasing effect of diluted fixedcost. Meanwhile, the trend of joint replenishment will be spreading and popularized asentrepreneurs prefer such approach to decrease the order cost and improve their profits.Based on the supply chain model with single supplier and single seller, I furtherintroduced the policies of emission cap and carbon tax. With the use of systematic dynamicsand the establishment of simulation model, the research analyzed the two policies’ effects on suppliers, sellers, the costs of the supply chain and carbon emissions. The research resultindicated that in the model of emission cap, different emission credits will cause sellers tochoose different optimal cycles and to transfer part of their costs and carbon emissions toproducers. In contrast, in the model with carbon tax, the raise of tax rates brings profits to thegovernment but results in the rise of supply chain cost and more carbon emissions,highlighting the importance of proper carbon tax rates in leading the development of greensupply chains.