The Impact of Supply Chain Coordination on the Environment
M.S. Thesis Presentation by Bilgesu Çetinkaya Department of Industrial Engineering Bilkent University
Environmental responsibility has become an important ingredient to do business. The increased awareness of customers about the environment and the governmental regulations are pushing supply chain entities to minimize any negative influence of their operations on the environment. Therefore, companies in today’s world have to take joint responsibility with their suppliers for the environmental impact of their actions. In this thesis, we study coordination and contracting in a two-echelon supply chain (i.e., a buyer and a vendor) under three emission regulations; cap, tax and cap- and-trade. We consider a setting with deterministic demand for a single product in the infinite horizon. We model and solve the replenishment problems of the buyer and the vendor assuming decentralized and centralized decision making approaches. Based on analytical and numerical comparisons of the optimal decisions under the two approaches, we conclude that coordination may not always be good for the environment. We also propose some novel contractual agreements that involve carbon credit sharing as a term, besides the traditional mechanisms such as quantity discounts. We finally provide an extension and a preliminary analysis for the case of stochastic demand.
This thesis is supervised by Asst Prof. Ayşegül Toptal
