Effect of Green Technology Investment on a Production-Inventory System with Carbon Tax

Carbon emissions play the central role in global warming. Manufacturing firms are significant contributors to carbon emissions. In many countries, regulatory authorities are taking actions to reduce emissions. Carbon taxation and cap-and-trade schemes are two mechanisms implemented in many countries...

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Bibliographic Details
Published in:Advances in Operations Research Vol. 2017; no. 2017; pp. 1 - 12
Main Author: Datta, Tapan Kumar
Format: Journal Article
Language:English
Published: Cairo, Egypt Hindawi Publishing Corporation 01.01.2017
Hindawi
John Wiley & Sons, Inc
Subjects:
Air quality management
Analysis
Carbon dioxide
Carbon footprint
Carbon taxes
Clean technology
Costs
Emissions trading
Environmental regulations
Environmental tax
Fossil fuels
Global warming
Green technology
Greenhouse effect
Greenhouse gases
Inventory
Inventory control
Inventory management
Manufacturing
Operations research
Order quantity
Production management
Production planning
Regulation
Remanufacturing
Socially responsible investments
Supply chains
Sustainability
Taxation
ISSN:1687-9147, 1687-9155
Online Access:Get full text
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Summary:Carbon emissions play the central role in global warming. Manufacturing firms are significant contributors to carbon emissions. In many countries, regulatory authorities are taking actions to reduce emissions. Carbon taxation and cap-and-trade schemes are two mechanisms implemented in many countries. In the present paper, the author analyzes a production-inventory model under a carbon tax system. The production rate is assumed to be a decision variable and can be set at any level within machine limits. A proportion of items produced are defective, and this proportion depends on the production rate. Demand depends on the selling price. Unit price is a decreasing function of the production rate. Emissions can be reduced to some extent by capital investment on green technology, and this capital investment amount is a decision variable. Customers are categorized as retail customers and wholesale customers. A discount is offered to the wholesale customers on the regular selling price. The results are illustrated by a numerical example and a sensitivity analysis is performed.
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ISSN:1687-9147
1687-9155
DOI:10.1155/2017/4834839