Manufacturer’s Emission Reduction Strategies Under Carbon Trading System

Global warming and greenhouse gases emission have been hot spotsthese years. Many enterprises are asked to reduce their carbon emissions tomitigate global warming. There is carbon emission alongside company’ssupply chain links. Reducing the impact of their operation strategies on theenvironment can be a vital mission for enterprises. Carbon trading allowscompanies to trade their emission quota in the market so as to meet theiremission target. Now carbon trading is regarded as one of the mosteffective tools to meet the emission cap.Inventory management plays an important role in manufacturer’soperation management and has significant effects on costs andenvironment. The thesis studies the manufacture’s inventory strategiesunder carbon trading system and analyses the carbon emission along thedecision links. This thesis consists of five chapters: Chapter1introducesthe study background and explains the research objective and significance;Chapter2reviews the relevant research literatures; Chapter3studies theemission reduction decisions and purchasing strategies of the manufacturerunder carbon trading system based on the conventional EOQ model. Byusing goal programming methodology, we compare the emissionabatement strategies and purchasing strategies under different models. Themain conclusions include that whether or not taking voluntary emissionreduction measures depends on the carbon allowance price and unit abatement costs; Chapter4considers the possibility of emergency demandbased on periodic review inventory policies. The emergency order isrealized through the air transport and marine transport according tospecified scenarios. The manufacture has to determine the optimal size forthe order quantity and safety stock under carbon trading system to reach abetter trade-off between costs and emissions. Chapter5summarizes theworks of this thesis and provides prospects for future researches.The introduction of carbon trading to supply chain managementmodels is still a fresh idea and there’re not many researches which studythe impact of carbon trading on operation strategies. By adding carbontrading to company’s inventory decisions and evaluating the carbonemission throughout the inventory management process, this thesisprovides the manufacturers with a new view to better trade-off betweencosts and environment. We use typical fixed-order quantity model andfixed-time period model to highlight the impact of carbon tradingparameters on manufacturer’s inventory and emission reduction decisions.