A multi-objective Environmental Hedging Point Policy with customer satisfaction criteria

Mohammadbagher Afshar-Bakeshloo, Ali Bozorgi-Amiri, Dr. Seyed Mojtaba Sajadi*, Fariborz Jolai

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


Recently, a new feedback control policy, named the Environmental Hedging Point Policy, to control the inventory and production was introduced. In this policy, inventory, backlog, and emission costs were taken into account. Employing low-emitting technology, this study aimed at developing this policy in order to integrate three objectives of costs, emissions, and customers’ satisfaction. Two prominent environmental control rules, namely command-and-control and cap-and-trade were examined by applying the proposed policy. To solve the problem, a new simulation-based optimization method combining OptQuest, experimental design, variance analysis, and response surface methodology, was conducted. This method improved the procedure of finding the second-order responses. Compromise solutions of a multiple-response problem were calculated thanks to the desirability function approach. Accordingly, the Pareto optimal surface was generated by changes in the weights or shape factors. The effectiveness of introduced policy was examined by sensitivity analysis. Thereupon, the shadow prices for both low-emitting technology and emission penalty were obtained. The results showed that considering shadow prices imposed by the regulatory authorities, the cap-and-trade rule was more effective in comparison with other rules.

Original languageEnglish
Pages (from-to)478-494
Number of pages17
JournalJournal of Cleaner Production
Early online date28 Jan 2018
Publication statusPublished - 1 Apr 2018

Bibliographical note

Publisher Copyright:
© 2018 Elsevier Ltd


  • Cap-and-trade
  • Customer satisfaction
  • Emission
  • OptQuest
  • Response surface methodology
  • Simulation optimization
  • Unreliable manufacturing systems


Dive into the research topics of 'A multi-objective Environmental Hedging Point Policy with customer satisfaction criteria'. Together they form a unique fingerprint.

Cite this