Supply Chains and the Environment

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Supply Chainsand theEnvironment

• Fuminori Toyasaki
• MKIDS Mini-Workshop
• September 10, 2003

The Virtual Center for Supernetworks
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Change of environment problem characteristics
Environment problems
Global Unspecific industries Large
uncertainty Future problem
Local Specific industries Small
uncertainty Present problem
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From Supply Chains to Green Logistics

Legislation Pressure Consumer
Pressure
Supply Chain Environmental Green
Logistics criteria
4
My Research Areas
Supply chain modeling with emission
minimization criterion Supply chain modeling
with E-cycling Global supply chain with
transboundary pollutions (future)
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Supply Chain Supernetworks and Environmental
Criteria

• Anna Nagurney
• and
• Fuminori Toyasaki
• Appears in Transportation Research
  Transportation and the Environment

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Manufacturers
i
m
1
1
j
Retailers
n
1
k
i
Demand Markets
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Assumptions of this model

• Each manufactures and retailers
• 1. Maximizes its profit
• 2. Minimizes its emissions.
• Cournot-Nash oligopoly market.

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A manufacturers muliticriteria decision-making
problem

Maximize
Subject to
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The optimality condition of the manufacturers
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A retailers multicriteria decision-making problem
Maximize
Subject to
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The multicriteria equilibrium
conditions for demand market k
For all retailers
modes
and

• For all manufactures

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Variational Inequality Formulation
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The Dynamics

• Describe the manufactures, retailers and
  consumers product and price adjustment.

• Formulate the dynamic adjust process as a
  projected dynamical system.

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Demand market price dynamics
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Dynamics between the retailers and the demand
markets
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The projected dynamical system
The dynamic model of the supply chain
supernetwrok and environmental criteria can be
formulated as follows



is the projection operator of
onto
is the initial point

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Stationary equilibrium points
Theorem The set of
stationary points coincides with the
set of equilibrium points. Proof.
See Dupuis and Nagurney (1993).


.
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Numerical Examples
1
2
Manufactures
1
2
Retailers
1
Demand Markets
2
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Change of environment criteria
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Increase in weights on environment criteria
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Summary

• First rigorous mathematical supernetwork model
  which deals with multicriteria decision makers,
  include environmental one.
• Developed both a static and a dynamic model.
• Evaluated the equilibrium solutions as we changed
  the weight of the environmental criteria.

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Electronic Waste Management and Recycling A
Multitiered Network Equilibrium Framework for
E-Cycling

• Anna Nagunrey and Fuminori Toyasaki

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Movement of E-Cycling

• The Home Appliances Recycling Law in Japan (2001)
• Waste from Electrical and Electronic Equipment
  Directive (WEEE) in EU (2008)

• 63 million PC will be obsolete in 2003 in the
  U.S.
• About 10 million waste electric products are
  dumped per year in Japan.
• Electronic wastes contain not only hazardous
  materials, but also precious ones.

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Source of Electronic Waste
1
h
r
Landfill
m
m1
1
i
Recyclers
Processors
n
n1
Landfill
j
1
O1
Landfill
1
k
o
Demand Markets
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Assumptions of the model

• The sources minimize their costs
• The recyclers and the processors maximize their
  profits, respectively.
• Cournot-Nash oligopoly market.

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The behavior of the sources
Minimize
Subject to
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Variational Inequality Formulation of the sources
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Recyclers behavior
Maximize
Subject to
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Processors behavior
Maximize
Subject to
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The demand markets
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Variational Inequality Formulation
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Numerical Examples
Sources
2
1
Recyclers
Landfill
r
1
2
3
Processors
Landfill
1
2
3
Landfill
Demand Markets
1
3
2
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Change of conversion rates
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High demand and low demand
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Summary

• Proposed a rigorous E-cycling mathematical model
• the endogenous equilibrium prices and
  material shipments between tiers.
• Decision makers behavior in a bottom tier
  influences those in a upper tier.
• influence of a bottom tiers conversion
  rate.
• influence of low demand.

Sustainable E-cycling system
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Global Supply Chain Networksand Transboundary
Emisssion Risk
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Economic Globalization and
Transboundary Pollution
Transboundary pollution (pollution across
boundaries) Carbon dioxides, methane,
Chlorofluorocarbons (CFCs), Sulphur dioxide,
Nitrogen oxides and so on
Economics globalization may exacerbate
transboundary pollutions (Coperand (1995),
Benarroch (2001) ) Increase in volume of
traffic Relaxation of environment standards
for helping domestic firms
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Risks of transboundary pollution
No clear relationship between how much a
country emits and how much is deposited there.


Hard to predict how much pollution travels
from a country according to the natural
conditions.
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Thank You !!