A carbon neutral supply chain management by considering emission-risk minimization and green purchasing through optimal decision-making

Abstract

This study addresses critical gaps in supply chain management (SCM) by integrating emission-risk minimization (ERM), green purchasing (GP), and profit maximization (PM). The research focuses on the optimal behaviors of manufacturers, agents, and retailers within the SCM framework to achieve carbon neutrality and reduce carbon dioxide emissions (CO2e). This study considers Guangdong province, China, a region facing challenges in optimizing energy systems and meeting CO2e reduction targets. Simulation-based optimization techniques within mathematical models are employed. A design of experiment (DOE) method was used to explore the dynamics of key variables in the SCM environment. Results reveal optimal behaviors for manufacturers, agents, and retailers, demonstrating the ideal values for profit and pricing decisions. Manufacturers optimize production quantity, achieving CO2e reduction and PM through ERM. Agents exhibit a strong commitment to GP practices, enhancing PM and carbon-neutral goals. Retailers get more PM than manufacturers and agents, contributing to a clean environment. Interestingly, retailers make contributions to the clean environment without considering ERM and GP in SCM. The study contributes novel insights by addressing the identified gap in SCM research, emphasizing the joint consideration of ERM, GP, and PM. This research assists manufacturers, agents, and retailers in terms of PM for economic objectives. It cleans the environment through carbon-neutral SCM in society.