Tradable permits and production–inventory strategies of the firm

Tradable permits and production–inventory strategies of the firm

0.00 Avg rating0 Votes
Article ID: iaor20081668
Country: Netherlands
Volume: 108
Issue: 1/2
Start Page Number: 329
End Page Number: 333
Publication Date: Jan 2007
Journal: International Journal of Production Economics
Authors:
Keywords: inventory, ecology
Abstract:

The paper deals with the effect of introduction of tradable permits on the production–inventory strategy of a firm. The basic model of Arrow and Karlin assumes that the firm minimizes the sum of linear holding and convex production costs. These costs depend explicitly on time. After introducing emission trading, the cost function will contain linear emission procurement/selling cost. We compare two optimal production–inventory strategies of a firm to examine changes of optimal strategies. The first strategy is the optimal solution of the Arrow–Karlin model. Then we analyze this model extended with costs of tradable permits.

Reviews

Required fields are marked *. Your email address will not be published.