Transportation cost and CO2 emissions in location decision models

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

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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
Originele taal-2Engels
Plaats van productieEindhoven
UitgeverijTechnische Universiteit Eindhoven
Aantal pagina's30
StatusGepubliceerd - 2014

Publicatie series

NaamBETA publicatie : working papers
Volume451
ISSN van geprinte versie1386-9213

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