Material Based Low-Carbon and Economic Supplier Selection with Estimation of GHG Emissions and Affordable Cost Increment for Parts Production among Multiple Asian Countries

Modern assembly products are often manufactured and transported as a part of a global supply chain, where suppliers are selected to reduce procurement cost s among multiple industrialized and emerging countries in Asia. Additionally, for environmental conscious manufacturing, it is important to visualize and reduce greenhouse gas (GHG) emissions for productions and logistics in whole global supply chains in order to resolve global warming problems. According to life cycle assessment (LCA), which quantitatively measures GHG emissions, even if the same types of materials are used in parts and components production, each part has a different level of GHG emissions and procurement cost depending on the country where it is manufactured. Therefore, the designing of a low-carbon supply chain requires the selection of appropriate material based low-carbon suppliers and making economic decisions using a life cycle inventory (LCI) database. To construct low-carbon supply chains that combine production of each part in various Asian countries, this study proposes a low-carbon and economic supplier selection method that utilizes an estimation of the GHG emissions and an affordable cost increment for each part using a LCI database developed incorporating Asian international input-output (I/O) tables. First, the GHG emissions for the production of each part in multiple Asian countries are estimated using the LCI database. Next, a bill of materials (BOM) with the GHG emissions and the procurement costs for each part is constructed in the cases of multiple production countries. Finally, the suppliers for producing each part are selected among the countries by integer programming in order to balance the reduction of GHG emissions and procurement costs.