Reducing emissions from production and distribution in three-echelon supply chains

Abstract

Reducing carbon emissions is one of the key goals of contemporary supply chains and logistics. This paper aims to formulate a novel three-echelon (supplier-3PL-retailer) supply chain model comprising green technology investment, variable demand, variable lead time, a dynamic shipping strategy, and an option for vehicle selection. The demand function considers the product's freshness index and maximum lifetime, along with the availability of stocks. Besides, the delivery from the 3 PL to the retailer is dynamically determined based on previous shipment information. A green vehicle is selected using a multi-criteria decision-making (MCDM) technique based on q-alternatives with n-characteristics for the transportation process and mathematically we linked this selection process to traditional three echelon supply chain optimization problem. The results show that combining green investment with an appropriate dynamic shipping strategy by using a selected green vehicle reduces the supply chain's emissions and total integrated cost. Furthermore, reducing lead time without compromising other supply chain factors stimulates demand of customers and produces fewer emissions with a significant reduction in the total integrated cost. A real-case-based study shows the performance of the proposed model and method, followed by sensitivity analyses. The study illustrates that 47.744% of the carbon emissions in Scenario 1 and 47.53% in Scenario 2 are reduced when an emission reduction strategy is implemented and in terms of total integrated cost our proposed model could save 4.85% cost in Scenario 1 while 4.96% for Scenario 2, which is significant.

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