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Seminar

02 MAY 2018 Seminar

Production and purchasing decisions for supply chain coordination under low-carbon constraints

Miss WANG Shuyi (PhD Candidate)

Miss WANG Shuyi (PhD Candidate)

ABSTRACT

With increasing public awareness of environmental deterioration, the world has realised the imminent need to step up forceful efforts on curbing greenhouse gases.  Since manufacturing is a major source of carbon emission, researchers have started to study the impacts of carbon constraints on manufacturing that often operates under environmentally unsustainable production planning and strategies. However, few research works have paid attention to the influence of carbon emission constraints on manufacturing production systems which may include multiple parties in a supply chain. 

The manufacturing industry bears many social responsibilities and legal obligations to reduce carbon emission. It is, however, inadequate and burdensome to meet the low-carbon targets by the manufacturers alone. This research fills the gap from two directions:

The first one focuses on the synergistic benefits achievable through coordination among supply chain players to ease the financial burdens and improve effectiveness in emission reduction. It incorporates Pareto improvement to ensure all supply chain members are likely to gain in emission reduction through coordination. Considering the complexity of the supply chain structure, we simplify the problem to two stages: manufacturer and retailer. The retailer collects the end-customer demands and conveys the market information to the manufacturer, who focuses on the production under a flexible cap which aligns emission reduction with the capacity adjustments. We incorporate the flexible cap-and-trade policy as it has rarely been investigated but would soon be deployed in the emissions trading system (ETS) in China. Moreover, the newsvendor model is adopted to simulate the demand uncertainty for studying the players’ behaviors and performance, while the Stackelberg game is exploited to solve this problem with three contracts, namely revenue sharing, cost sharing, and two-part tariff. It contributes to investigating the effectiveness of the flexible cap-and-trade policy for emission reduction, under which the coordination problem and Pareto improvement conditions are solved by the Newsvendor models.

The second one investigates the effectiveness of the option contract on manufacture optimality under the emission trading scheme (ETS) system, in which the joint emission ordering and production pricing problem under demand uncertainty is solved by the newsvendor model. Newsvendor models are built to investigate the behaviours and performances of manufacturers, with a call option contract when the price-driven demand is uncertain. The joint emission ordering and product pricing problem is solved by three emission ordering policies: the non-option, only option, and mixed emission ordering policy. The objective of this research is to find out the optimal emission required and the optimal selling price, to solve the joint pricing and procurement problem under the emission constraints. It contributes to exploring the call option contract to provide more choices and patterns for carbon asset management under the ETS-restricted environment.

Venue

HW8-28

Speaker

Miss WANG Shuyi

Date

April 20, 2018 (Friday)

Time

9:15am – 10:45am

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