Currently many companies are interested in reduction of the carbon emissions associated with their supply chain activities such as transportation and operations. Operational decisions, such as modifications in order quantities could an effective way in reducing carbon emissions in the supply chain. Cap-and-trade regulation, sometimes called emissions trading, is a market-based tool to limit greenhouse gas emissions. Under cap-and-trade regulation, emission credits are allocated to the firms and the firms trades emissions under cap-and-trade schemes. In this paper, we propose a single-manufacturer single-buyer two-echelon supply chain problem under the cap-and-trade mechanism incorporating the carbon emissions caused by transportation and warehousing activities where a single manufacturer produces a family of items in order to deliver a family of items to a single buyer at a fixed interval of time for effective implementation of Just-In-Time (JIT) Purchasing. An integrated multi-product lot-splitting model of facilitating multiple shipments in small lots between buyer and manufacturer is developed in a JIT Purchasing environment. Also, an iterative heuristic algorithm is developed to derive the common order interval, the number of intervals for each product and the number of shipments between the buyer and the manufacturer during the common interval. A numerical example is given to illustrate the savings in reduction of total cost and carbon emissions by the inventory model incorporating cap-and-trade mechanism compared to the classical inventory model. The proposed inventory model could be useful for the practical solution of two-echelon supply chain inventory problem under cap-and-trade mechanism.

In pursuing carbon emission reduction efforts, companies have focused for the most part on reducing emissions due to the more efficient equipment and facilities. However they overlook a significant source of carbon emissions, one that is driven by operational policies. Currently companies are looking for solutions to reduce carbon emissions associated with their operations. Operational adjustments, such as modifications in order quantities could an effective way in reducing carbon emissions in the supply chain. Also, Cap-and-Trade mechanism is generally accepted as on of the most effective market-based mechanism to reduce carbon emissions. In this paper, we investigate a supply chain with single manufacturer and multiple retailers multi-product inventory model under the cap-and-trade system incorporating the carbon emissions caused by transportation and warehousing activities. Also, we provide an iterative solution algorithm and derive the common order interval and the number of intervals for each product. We show by numerical example that the inventory model incorporating cap & trade mechanism can reduce total cost and carbon emissions compared to the classical inventory model. Using the numerical examples, we also investigates different carbon price on the performance of the inventory model.

The process that a new energy policy introduces and merges into the formal social system is an important but difficult journey for the transition to the low carbon society. Meanwhile, the government was obliged to allocate carbon emission reduction, the companies are called obligatory participants through emissions trading scheme were building an internal greenhouse gas reduction system to reduce Risk and to respond this new system. However, the internal response and reduction system of the Waste Field are easy to exposure to the ETS Risk because the local government employee is unaware of the ETS. Thus, it is necessary to establish a framework for rational decision making institutions through analyzing the existing system of greenhouse gas energy target management system. This study was predicted for the first phase emissions trading allowances based on excess or deficiency received through the 2015 quota allocation applications and explained the process proceeded in greenhouse gas energy target management system by the Jeju Special Self-case analysis of the waste sector, predicted potentially losses cost during the first phase in the emissions trading credits that are traded on the KRX market price. Furthermore, throughout the sensitivity analysis of major waste process parameter suggested the internal system to reduce greenhouse gas emissions directly as well as external policies by the direct participation of citizens through the local recycling center expansion. After all, this study suggested the need for the construction of internal and external system corresponding to these systemic risk.