Abstract
The paper considers heterogeneous fixed fleet vehicle routing with carbon emission to minimizing the sum of variable operation costs. A cost-benefit assessment of the value of purchasing or selling of carbon emission rights, using a mixed integer-programming model to reflect heterogeneous vehicle routing, is incorporated. Essentially, the use of a carbon market as a means of introducing more flexibility into an environmentally constrained network is considered. Tabu search algorithms are used to obtain solutions within a reasonable amount of computation time. In particular, we show the possibility that the amount of carbon emission can be reduced significantly without sacrificing the cost due to the benefit obtained from carbon trading.
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