Journal of the Korean Operations Research and Management Science Society (한국경영과학회지)

The Korean Operations Research and Management Science Society (한국경영과학회)
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The Analysis of Carbon Emission Costs under Milk Run Logistics Strategy

순회배송 물류전략에서 탄소배출 비용의 효과 분석

  • Min, Daiki (School of Business, Ewha Womans University)
  • Received : 2014.07.30
  • Accepted : 2014.11.04
  • Published : 2015.02.28
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Abstract

This paper develops an analytic model for minimizing the cost of distributing items by truck from one supplier to many customers under Milk run logistics strategy. The model derives formulas for not only inventory and transportation costs but also costs associated with carbon emission trading scheme. In addition, monetary investment for reducing carbon emissions is considered. We analyze how to determine optimal shipment size and carbon emission reduction investment. The purpose of this work is to evaluate the effects of carbon emission trading scheme on the Milk run logistics strategy in terms of how much to reduce carbon emissions and/or inventory and transportation costs. We analytically show that it is possible to reduce carbon emissions while reducing inventory and transportation costs by introducing cap-and-trade carbon emission trading scheme under certain conditions.

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