Publication Date
Authored by
Brian Hinkamp, Marwan Ismael
Advisor(s): Elenna Dugundji
Topic(s) Covered:
  • Network Design

The global transportation sector holds the top position as the primary source of greenhouse gas emissions, with road transportation, especially heavy-duty vehicles, being the primary source. Greenhouse gases significantly impact global warming by trapping heat in the Earth's atmosphere, causing rising temperatures. This phenomenon, the greenhouse effect, results in various climate change repercussions. In response to growing climate change concerns, international, national, and industrial communities have taken action. Companies globally are pursuing initiatives to achieve net-zero emissions, aiming for a climate-neutral world by midcentury. One approach to combat climate change involves optimizing a company's supply chain design. An efficient supply chain network design can lower transportation costs, reduce carbon emissions, and improve a firm's overall performance. This study explores the potential impact of introducing a middle-mile fulfillment center on transportation costs and greenhouse gas emissions within an oil field service company's supply chain network. By evaluating two candidate locations proposed by the project sponsor, the research assesses variable transportation costs and total carbon emissions generated during goods transportation to meet customer demand. This paper introduces a mixed-integer linear programming formulation as a solution to the single-period, multi-echelon supply chain network design problem. The model aims to minimize total transportation costs and greenhouse gas emissions, primarily from mobile sources within the supply chain. The research team found that neither of the proposed locations provides benefits in terms of transportation costs or carbon emissions. This study highlights the importance of integrating environmental considerations into strategic supply chain network design decision-making.