AJOR  Vol.3 No.6 , November 2013
Green Investment Cost Optimization Model in the Supply Chain
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.
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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