Title: The price-dependent newsvendor models with carbon constraints

Authors: Honglu Liu; Xiaolan Guan; Zhenji Zhang

Addresses: School of Traffic and Transportation, Beijing Jiaotong University, Beijing, 100044, China ' School of Economics and Management, Beijing Institute of Graphic Communication, Beijing, 102600, China ' School of Economics and Management, Beijing Jiaotong University, Beijing, 100044, China

Abstract: In this paper, we incorporate carbon emission constraints into the price-dependent newsvendor models. In the two settings with carbon emission tax and cap-and-trade mechanism, respectively, we determine the newsvendor's optimal order quantity and the optimal selling price simultaneously. We consider two different ways in which price affects the demand distribution, namely price only affects the location or scale of the demand distribution. The impact of carbon emission tax, carbon price and carbon emission quota on price and inventory decisions, carbon emission and profit are examined. Finally, a numerical example is presented to verify the analysis.

Keywords: newsvendor models; carbon emissions tax; carbon cap and trade; optimal order quantity; optimal selling price; price-dependent demand; CO2; carbon dioxide; demand distribution; profit.

DOI: 10.1504/IJSTL.2015.069126

International Journal of Shipping and Transport Logistics, 2015 Vol.7 No.3, pp.377 - 391

Available online: 19 Mar 2015 *

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