Production Decision Considering Licensing and Carbon Emission

Abstract

This paper presents four mathematical models to determine the production quantities of new and remanufactured products that maximize the total profits when considering carbon emission cap and trade and licensing These models include sales revenues manufacturing/remanufacturing costs licensing revenue/cost and revenue or cost from carbon credit trading Finally numerical examples are provided to explore the comparison results for the optimal manufacturing/remanufacturing decisions total profits and carbon emissions as well as to analyze the impact of parameters The results indicate that the increase in the unit production cost of new/remanufactured products would reduce the manufacturer/remanufacturer profit and production quantity However the increase in unit carbon emissions of products produced by the manufacturer/remanufacturer in the process of manufacturing/remanufacturing would also reduce the manufacturer/remanufacturer profit and production quantity Besides we also found the increase in carbon trading price would not influence the manufacturer's profit obviously It is because the manufacturer's profit would get benefit from the increase in carbon trading price and the reduction in remanufacturer's production would make the received licensing fee decrease at the same time The increase in trading price would let remanufacturer have better profit from selling the carbon quotas to increase he's profit Finally the results of analyzing the licensing strategy and licensing fee also provide some suggestions to manufacturers and policy-makers

Date of Award	2020
Original language	English
Supervisor	Shiow-Yun Chang (Supervisor)