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Green Investment Cost Optimization Model in the Supply Chain

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DOI: 10.4236/ajor.2013.36044    4,507 Downloads   7,607 Views   Citations

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.

Conflicts of Interest

The authors declare no conflicts of interest.

Cite this paper

S. Sim and H. Jung, "Green Investment Cost Optimization Model in the Supply Chain," American Journal of Operations Research, Vol. 3 No. 6, 2013, pp. 454-462. doi: 10.4236/ajor.2013.36044.

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