Optimal Production Decisions with Emissions trading

Abstract

To discuss the decision making problem of optimal production in supply chain enterprises, by taking a two-stage supply chain with one supplier and one retailer as the research objective and considering emissions trading, the profit models of both centralized and decentralized supply chains were proposed with logical proof. The conclusions show that given finance demand for products, carbon-trading policy enables members of the supply chain to make more money from investing carbon emissions. In addition, in concentration decision, emission reduction effort best that in decentralized supply chain and all members' profit will grow up if the retailer provide the supplier with appropriate subsidies. Furthermore, customs' low-carbon awareness provides a boost for emission reduction efforts and leads to more benefits to the enterprises