This article applies multiobjective optimization to show how the tradeoffs between cost and carbon emissions may be obtained in the context of sustainable operations. We formulate a model where transportation mode selection and order quantity decisions are considered jointly. We derive structural properties of the model and develop several insights. First, we show that switching to a greener mode of transportation while continuing to optimize the total logistics costs function may lead to a dominated solution. Second, we prove that the modal shift occurs only under strong carbon emissions reduction requirements. Third, we show that the efficient frontier is non-convex and we analyze some implications. Finally, we analyze the impacts of an increase in truck capacity. The results are illustrated through an example of a French retailer.
- Sustainable supply chain management
- Multiobjective optimization
- Transportation mode selection
- Order quantity optimization
Bouchery, Y., Ghaffari, A., Jemai, Z., & Fransoo, J. C. (2016). Sustainable transportation and order quantity: insights from multiobjective optimization. Flexible Services and Manufacturing Journal, 28(3), 367-396. https://doi.org/10.1007/s10696-016-9240-z