Two-echelon supply chain model considering carbon emission and probabilistic constraints

This study considers an integrated two-echelon supply chain with carbon emissions from transportation. It is assumed that transportation and emission reduction policies affect fuelconsumption, which in turns affects costs and carbon emissions. This study aims to develop a mathematical model for a two-level supply chain consisting of a supplier (here the producer) and a buyer so that the cost of the product, as well as the product arrival time to the customer, is minimized. This model uses the vendor management inventory policy to control the flow of information and the economic production quantity model to control the flow of materials. It also considers the warehouse limits, the level of allowable shortage, the production capacity and the budget as probabilistic constraints. Since the costs cannot be predicted with certainty, it is assumed that data behave under uncertain environment. Then, the developed model is solved using the TH method. Finally, sensitivity analysis is performed on the parameters.