Supply Chains and the Environment Fuminori Toyasaki MKIDS Mini-Workshop September 10, 2003 The Virtual Center for Supernetworks

Change of environment problem characteristics Environment problems Local Specific industries Small uncertainty Present problem Global Unspecific industries Large uncertainty Future problem

From Supply Chains to Green Logistics Supply Chain + Environmental = Green Logistics criteria * Legislation Pressure * Consumer Pressure

My Research Areas * Supply chain modeling with emission minimization criterion * Supply chain modeling with E-cycling * Global supply chain with transboundary pollutions (future)

Supply Chain Supernetworks and Environmental Criteria Anna Nagurney and Fuminori Toyasaki Appears in Transportation Research: Transportation and the Environment

1 i m 1 n j 1ki Manufacturers Retailers Demand Markets

Assumptions of this model Each manufactures and retailers 1. Maximizes its profit 2. Minimizes its emissions. Cournot-Nash oligopoly market.

A manufacturer’s muliticriteria decision- making problem Maximize Subject to

The optimality condition of the manufacturers

A retailer’s multicriteria decision- making problem Maximize Subject to

The multicriteria equilibrium conditions for demand market k modes For all retailers and For all manufactures

Variational Inequality Formulation

The Dynamics 1.Describe the manufactures’, retailers’ and consumers’ product and price adjustment. 2.Formulate the dynamic adjust process as a projected dynamical system.

Demand market price dynamics

Dynamics between the retailers and the demand markets

The projected dynamical system The dynamic model of the supply chain supernetwrok and environmental criteria can be formulated as follows: onto is the projection operator of is the initial point

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

Manufactures Retailers Demand Markets Numerical Examples

Change of environment criteria Total Emission

Increase in weights on environment criteria Total Emission

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.

Electronic Waste Management and Recycling: A Multitiered Network Equilibrium Framework for E-Cycling Anna Nagunrey and Fuminori Toyasaki

Movement of E-Cycling 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. The Home Appliances Recycling Law in Japan (2001) Waste from Electrical and Electronic Equipment Directive (WEEE) in EU (2008)

1h 1i j 1 1 k r m n m+1 n+1 O+1 o Recyclers Processors Source of Electronic Waste Demand Markets Landfill

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

The behavior of the sources Minimize Subject to :

Variational Inequality Formulation of the sources

Recyclers’ behavior Maximize Subject to

Processors’ behavior Maximize Subject to

The demand markets

Variational Inequality Formulation

Numerical Examples Sources r Recyclers Processors Demand Markets Landfill

Change of conversion rates

High demand and low demand

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 tier’s conversion rate. * influence of low demand. Sustainable E-cycling system

Global Supply Chain Networks and Transboundary Emisssion Risk

Economic Globalization and Transboundary Pollution Economics globalization may exacerbate transboundary pollutions (Coperand (1995), Benarroch (2001) ) * Increase in volume of traffic * Relaxation of environment standards for helping domestic firms Transboundary pollution (pollution across boundaries) Carbon dioxides, methane, Chlorofluorocarbons (CFCs), Sulphur dioxide, Nitrogen oxides and so on

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.

Thank You !!