Three-echelon supply chain model considering carbon emission and item deterioration

Abstract

This study considers an integrated three-echelon supply chain with carbon emissions from transportation and warehousing, as well as disposing of the deteriorated items. It is assumed that transportation and emission reduction policies affect fuel consumption, which in turns affects costs and carbon emissions. The proposed model simultaneously optimizes the number of deliveries and the delivery size from a supplier to a third-party logistics service provider (3PL), and from the 3PL to the buyer in a three-echelon supply chain model considering deterioration and carbon emission. A numerical example and sensitivity analysis are presented to illustrate the proposed model. The result shows the benefit of supply chain integration in terms of total supply chain cost and carbon emission reduction.