A GREEN FINANCE BI-OBJECTIVE MODEL IN A THREE STAGE SUPPLY CHAIN

Abstract

In this paper, we study a novel green financing model for a three-stage supply chain. The model considers nonlinear relations among CO2 emissions, budget spent for emission control, and quantity of products moved towards and worked in the facilities. Moreover, the model, besides the minimization of CO2 emissions, aims at balancing the commodity flow over the different facilities. The latter objective is represented by the linear combination of two quadratic penalty functions: one associated with the arc flows and the other with the entering flows at the facilities, respectively. The model is solved on both synthetic instances and a realistic network, demonstrating its effectiveness as a tool for strategically supporting green financing decisions in supply chains.