A decision analysis on flexible scale of green logistics under limited carbon emission with real options concept

This paper aims at using quantified emission limitation as an important indicator when choosing the most optimal scale. Under the limitation of emission, transportation practitioners can buy the allowances from outside market or upgrade systems to conform the standard. In this paper, the related green investment cost and transportation price can be assessed, and the transportation service cost that originates from different scales is related to the expected transportation price. Under the above descriptions, this paper applies the real options approach to individually find out the project values of two stages and the most suitable timing to expand the scale. To conclude, the key issue of this paper is to help transportation practitioners to take balance between green economics and financial economics.