Transportation cost and CO2 emissions in location decision models

J.C. Velazquez Martinez, J.C. Fransoo, E.E. Blanco, J. Mora-Vargas

Research output: Book/ReportReportAcademic

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Abstract

An increasing number of companies are making their supply chains more sustainable. Because transportation accounts for a large share of global CO2 emissions, finding logistics alternatives that reduce carbon emissions while keeping costs low is a priority. In this article, we study the trade-off between cost and CO2 emissions by using a multiobjective approach for the facility location problem. We propose a model with new cost and CO2 structures for the p-Median problem to determine a sustainable location. To solve this problem, we develop the multiobjective combinatorial optimization cross-entropy method, to address the difficulties of combinatorial models. We test the algorithm against two p-Median problems from prior literature and show that it can approximate the Pareto frontier efficiently. We also conduct an experimental study for a consumer packaged goods company in Mexico City to provide insights on the structure of the Pareto frontier for a practical sustainable facility location case. The study shows that by selectively changing a subset of locations, companies may achieve a substantial reduction in carbon emissions under similar costs
Original languageEnglish
Place of PublicationEindhoven
PublisherTechnische Universiteit Eindhoven
Number of pages30
Publication statusPublished - 2014

Publication series

NameBETA publicatie : working papers
Volume451
ISSN (Print)1386-9213

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Location decision
Decision model
CO2 emissions
Costs
Transportation costs
P-median
Pareto
Facility location
Carbon emissions
Combinatorial optimization
Co2
Supply chain
Mexico
Cross-entropy
Trade-offs
Experimental study
Consumer packaged goods
Logistics
Location problem

Cite this

Velazquez Martinez, J. C., Fransoo, J. C., Blanco, E. E., & Mora-Vargas, J. (2014). Transportation cost and CO2 emissions in location decision models. (BETA publicatie : working papers; Vol. 451). Eindhoven: Technische Universiteit Eindhoven.
Velazquez Martinez, J.C. ; Fransoo, J.C. ; Blanco, E.E. ; Mora-Vargas, J. / Transportation cost and CO2 emissions in location decision models. Eindhoven : Technische Universiteit Eindhoven, 2014. 30 p. (BETA publicatie : working papers).
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Velazquez Martinez, JC, Fransoo, JC, Blanco, EE & Mora-Vargas, J 2014, Transportation cost and CO2 emissions in location decision models. BETA publicatie : working papers, vol. 451, Technische Universiteit Eindhoven, Eindhoven.

Transportation cost and CO2 emissions in location decision models. / Velazquez Martinez, J.C.; Fransoo, J.C.; Blanco, E.E.; Mora-Vargas, J.

Eindhoven : Technische Universiteit Eindhoven, 2014. 30 p. (BETA publicatie : working papers; Vol. 451).

Research output: Book/ReportReportAcademic

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AB - An increasing number of companies are making their supply chains more sustainable. Because transportation accounts for a large share of global CO2 emissions, finding logistics alternatives that reduce carbon emissions while keeping costs low is a priority. In this article, we study the trade-off between cost and CO2 emissions by using a multiobjective approach for the facility location problem. We propose a model with new cost and CO2 structures for the p-Median problem to determine a sustainable location. To solve this problem, we develop the multiobjective combinatorial optimization cross-entropy method, to address the difficulties of combinatorial models. We test the algorithm against two p-Median problems from prior literature and show that it can approximate the Pareto frontier efficiently. We also conduct an experimental study for a consumer packaged goods company in Mexico City to provide insights on the structure of the Pareto frontier for a practical sustainable facility location case. The study shows that by selectively changing a subset of locations, companies may achieve a substantial reduction in carbon emissions under similar costs

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Velazquez Martinez JC, Fransoo JC, Blanco EE, Mora-Vargas J. Transportation cost and CO2 emissions in location decision models. Eindhoven: Technische Universiteit Eindhoven, 2014. 30 p. (BETA publicatie : working papers).