Carbon Footprint and the Management of Supply Chains: Insights from Simple Models



Using relatively simple and widely used models, we illustrate how carbon emission concerns could be integrated into operational decision-making with regard to procurement, production, and inventory management. We show how, by associating carbon footprint parameters with various decision variables, traditional models can be modified to support decision-making that accounts for both cost and carbon footprint. We examine how the values of these parameters as well as the parameters of regulatory emission control policies, such as a tax on carbon emissions or a cap-and-trade system, affect cost and emissions. We use the models to study the extent to which carbon reduction requirements can be addressed by operational adjustments alone, as an alternative to costly investments in carbon-reducing technologies. We also use the models to investigate the impact of collaboration among firms within the same supply chain on their costs and carbon emissions and study the incentives firms might have in seeking such cooperation. We provide a series of insights that highlight the impact of operational decisions on carbon emissions and the importance of operational models in evaluating the impact of different regulatory policies and in assessing the benefits of investments in more carbon efficient technologies.
Saif Benjaafar is a Professor of Industrial & Systems Engineering at the University of Minnesota where he is also Director of the Industrial & Systems Engineering Program, Director of the Center for Supply Chain Research, and a Faculty Scholar with the Center for Transportation Studies. He was a Distinguished Senior Visiting Scientist at Honeywell Laboratories and a Visiting Professor at universities in France, Belgium, Hong Kong, China and Singapore. He Holds PhD and MS degrees from Purdue University and a BS degree from the University of Texas at Austin. His research is in the areas of supply chain management, service and manufacturing operations, and production and inventory systems, with a current focus on sustainability and environmental modeling. He is on the editorial board of several journals including MSOM, POM, NRL, and IIE. His papers have been published in various journals including Management Science, Operations Research, and MSOM. His research has been funded by several US government agencies, including NSF, DOT, DHS, and DARPA. He has consulted widely with leading companies such as Honeywell, General Mills, 3M, and Intel among many others. He is a Fellow of the Institute of Industrial Engineers (IIE). More information can be found on his website:
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Morteza Pourakbar