Impact of Carbon Emission Regulations in a Supply Chain Management Under Home Delivery Policy

In today’s evolving world, customers are happy to order products online and to get the order at their doorstep. Meanwhile, transportation increases due to the rise in home deliveries. The transportation sector shares a significant part of the total emissions among various industries. Therefore, finding a suitable policy to control emissions due to home delivery is crucial. In this direction, the study introduces a supply chain model consisting of one manufacturer and one retailer. The retailer opens three selling channels, online, offline, and buy-online-pick-up-in-store, to sell the final product under the home delivery strategy. The study applies various carbon policies, like carbon tax and cap-and-trade policies, to minimize emissions due to transportation involved in home delivery and buy-online-pick-up-in-store strategy. The study aims to maximize the profit by determining the optimal product price values in different channels, lot size, production rate, green investment, lead time, and safety stock. Numerical findings show that the total profit is maximum under the carbon cap-and-trade policy. Further findings show that the profit is 32.73% less when only BOPS and offline channels are considered. The profit is 34.70% less than the proposed model when only online and offline scenarios are considered. Sensitivity analysis shows that the initial demand parameter of distinct channels is the most sensitive.