Carbon-capped Distribution Planning: A JIT Perspective

Abstract

Products distribution and transportation is one of the largest sources of CO2 emission in supply chains. To date, a number of researchers have argued that intensive transportation activities through popular distribution strategies such as Just-In-Time (JIT) could significantly increase carbon emissions within logistics chains. However, a systematic understanding of how JIT distribution affects carbon emissions is still lacking in current literature. In this study, we develop a bi-objective optimization model for a carbon-capped JIT distribution of multiple products in a multi-period and multi-echelon distribution network. The aims are to jointly minimize total logistics cost and to minimize the maximum carbon quota allowed per period (carbon cap). The considered problem is investigated under three different carbon emission constraints namely periodic, cumulative and global. Since the studied problem is NP-Hard, a non-dominated sorting genetic algorithm-II (NSGA-II) is developed and its parameters are tuned by Taguchi method. For further quality improvement of the developed solution approach, a novel local search approach called modified firefly algorithm incorporates NSGA-II. Different sizes of the problem are considered to compare the performances of the proposed hybrid NSGA-II and the classical one. Finally, the results are presented along with some policy and managerial insights. For policy makers, the findings show the impact of varying the carbon emission cap on total cost and total emissions under JIT distribution concept. From managerial perspectives, we analyze the relationships between average inventory holding and backlog level per period which can assist mangers to identify critical decisions for JIT distribution of products in carbon-capped environment.