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Carbon-Regulated EOQ Models with Consumers’ Low-Carbon Awareness

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  • Zhimiao Tao

    (Uncertainty Decision-Making Laboratory, Sichuan University, Chengdu 610064, China
    Low Carbon Technology and Economy Research Center, Sichuan University, Chengdu 610064, China)

  • Jiuping Xu

    (Uncertainty Decision-Making Laboratory, Sichuan University, Chengdu 610064, China
    Low Carbon Technology and Economy Research Center, Sichuan University, Chengdu 610064, China)

Abstract

In the context of a low-carbon economy, firms must make positive responses in their operation management, including inventory management. Carbon-emission regulation policies have marked their influence on the optimization of low-carbon inventory systems. In addition to regulation policies, consumers’ low-carbon awareness can also influence inventory systems by affecting demand. This study investigates the influence of regulation policies and consumers’ low-carbon awareness on optimal order size, emission levels, and total costs. Two widely used regulation policies, i.e., the carbon-tax mechanism and cap-and-trade mechanism, are incorporated into the classical Economic Order Quantity (EOQ) model. Analytical conclusions were obtained by optimization methods to indicate the influences of regulation policies and consumers’ low-carbon awareness. Our study implies that inventory systems under different regulation policies perform similarly except with regard to total cost. Numerical examples provide more support for these analytical conclusions. Some managerial insights can be derived from the analytical conclusions and numerical examples.

Suggested Citation

  • Zhimiao Tao & Jiuping Xu, 2019. "Carbon-Regulated EOQ Models with Consumers’ Low-Carbon Awareness," Sustainability, MDPI, vol. 11(4), pages 1-16, February.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:4:p:1004-:d:206147
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    References listed on IDEAS

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    1. Konstantaras, Ioannis & Skouri, Konstantina & Benkherouf, Lakdere, 2021. "Optimizing inventory decisions for a closed–loop supply chain model under a carbon tax regulatory mechanism," International Journal of Production Economics, Elsevier, vol. 239(C).
    2. Zhimiao Tao, 2019. "Two-Stage Supply-Chain Optimization Considering Consumer Low-Carbon Awareness under Cap-and-Trade Regulation," Sustainability, MDPI, vol. 11(20), pages 1-20, October.

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