Socially responsible transportation and lot sizing : insights from multiobjective optimization

Abstract

This paper applies multiobjective optimization to show how the efficient tradeoffs between cost and carbon emissions may be obtained in the context of socially responsible operations. We thus formulate a model where transportation mode selection and lot sizing decisions are considered jointly. We derive structural properties of the model and develop several insights that remain hidden under single-objective optimization. First, we show that switching to a socially responsible mode of transportation while continuing to optimize the total logistics costs function may lead to a dominated solution. Second, we prove that the modal shift occurs only under strong carbon emissions reduction requirements. Third, we show that the efficient frontier is non-convex. Two classical ways of taking carbon emissions into account in the decision making process are also compared and the results are illustrated through an example of a French retailer.

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