Carbon assessment model for supply chain network

Companies are facing with concerns over the environmental impact of their activities. Companies now recognize the importance of greening their supply chains by minimizing carbon emissions to meet the regulation laid down by various agencies. “Cap” regulation for Green House Gasses reduction is adding complexity to the situation. This paper proposes a mixed integer linear programming model to evaluate a network supply chain operations considering economic and environmental factors. Carbon cap and credit are considered in the model. Multi-supplier, multi-plant, multi-product, and multi-customer zone problem environment is considered here. The model does a trade-off between logistic cost and GHG emission cost to determine the optimal flow of material through the supply chain. The model is demonstrated with a single product, multi-plant, multi-supplier and multi-demand zones example. This example shows that carbon emission is adding a considerable cost to total cost of the supply chain operations.