TITLE:
Green Investment Cost Optimization Model in the Supply Chain
AUTHORS:
Seungbae Sim, Hosang Jung
KEYWORDS:
Green Investment Cost Optimization Model in the Supply Chain
JOURNAL NAME:
American Journal of Operations Research,
Vol.3 No.6,
October
24,
2013
ABSTRACT:
The objective of this study is to develop a model that determines
the optimal points for investment in green management by defining a
mathematical relationship between carbon trading profits and investments in
green management using a company’s supply chain information. To formulate this
model, we first define and analyze a green supply chain in a multi-dimensional
and quantitative manner. The green investment alternatives considering in our
model are as follows: 1) purchasing eco-friendly raw materials that cost more than
conventional raw materials but whose use in production results in
lower CO2 emissions; 2) replacing current facilities with new
eco-friendly facilities that have the capability to reduce CO2 emissions; and 3) changing modes of transport from less eco-friendly to more
eco-friendly modes. We propose a green investment cost optimization (GICO)
model that enables us to determine the optimal investment points. The proposed
GICO model can support decision-making processes in green supply chain
management environments.