INCORPORATING ENVIRONMENTAL CONCERNS IN SUPPLY CHAIN OPTIMIZATION - Environmentally Conscious Materials Handling - page 116

CHAPTER 4
INCORPORATING ENVIRONMENTAL
CONCERNS IN SUPPLY CHAIN
OPTIMIZATION

Maria E. Mayorga
Clemson University
Clemson, South Carolina

Ravi Subramanian
Georgia Institute of Technology
Atlanta, Georgia

1 INTRODUCTION 117 5 APPROACHES TO

OPTIMIZATION 127

2 LEGISLATIVE FACTORS 119

5.1 Nonlinear Programming (NLP) 127

2.1 Extended Producer Responsibility

(EPR)

5.2 Multiobjective Optimization 128

119

5.3 Dynamic Models 129

2.2 Cap and Trade 120

5.4 Stochastic Programming and

Robust Optimization

2.3 Uncertainty in the Evolution of

Environmental Legislation

130

121

5.5 Optimality Criteria 131

3 ECONOMIC FACTORS 121

5.6 Selecting an Appropriate

Method

3.1 Resource Scarcity 122

132

3.2 Competition from Low-Cost

Producers

6 SUMMARY 132

123

3.3 The Green Segment 124

REFERENCES 133

4 SOCIAL FACTORS 125

1 INTRODUCTION

Increasing regulatory and market pressures during the past decade have fun-
damentally impacted supply chain decision making, starting from raw material
sourcing through processing, use, and postuse — including the logistical activities
in between. Linear supply chain models with unidirectional flows of materials
from the upstream to the downstream links have made way for closed-loop mod-
els that necessarily involve return flows downstream to upstream (see Figure 4.1).
Often, these new supply chain models involve new parameters, decision variables,
constraints, and potentially conflicting and multiple objectives, translating into
a need for innovative optimization methods. In this chapter, we describe how
conventional supply chain optimization models have to be recast and solved dif-
ferently to accommodate legislative, economic, and social pressures related to
the life-cycle environmental impacts of products.

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