Environmental constraints in joint product and supply chain design optimization

Abstract

• A joint family product and supply chain optimization model is considered. • We model limitation of carbon footprint as constraints while optimizing costs. • We optimize the carbon footprint under cost constraints. • The product commonality, the cost and the carbon emission allocation are analyzed. Environmental concerns are increasingly taken into account by companies, owing to the significant legal and consumer issues being raised today. This paper considers the environmental constraints inherent in the design of a product family and its supply chain. Mathematical models are proposed for optimizing costs in the face of carbon emissions restrictions and for optimizing carbon emissions, given the need to limit costs in the current economic climate. A method is provided, along with accompanying graphical illustrations, to enable the analysis of each of the three parts of the cost and carbon emissions issue, that is, production, transportation, and component, on three different academic case studies. Analysis of the models applied on our case studies illustrates that, while optimizing carbon emissions is extremely costly, reducing them can be achieved efficiently.