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REFURBISHING SUPPLY CHAIN OPTIMIZATION UNDER CAP-AND-TRADE POLICY: A COMPARATIVE ANALYSIS OF DISTRIBUTION CHANNEL STRATEGIES

Jurnal Ilmiah Ilmu Terapan Universitas Jambi · Vol. 10 No. 1 (2026) · pp. 268–291

DOI
10.22437/jiituj.v10i1.52985
ISSN
2580-2259, 2580-2240
Published
2026-02-19
Publisher
LPPM Universitas Jambi
Language
en
License
creativecommons.org/licenses/by/4.0

Abstract

To advance the circular economy, refurbishing activities are essential to mitigate industrial waste. While cap-and-trade policies regulate greenhouse emissions, their mathematical interactions with refurbishing distribution strategies remain under-researched. This study assesses the implications of distribution structures on profitability under environmental constraints. Two multivariable optimization models were developed: Model C (direct distribution) and Model M (indirect distribution via a retailer). Objective functions were optimized for price and production volume under cap-and-trade constraints. A sensitivity analysis of 15 parameters employed partial derivatives to determine the profit function's rate of change relative to market potential (Q), price elasticity (λ), cannibalization (β), and carbon costs. Model C yielded a higher optimum value ($165,796) than Model M ($124,341). Sensitivity analysis identified Q as having the highest positive gradient. Conversely, profits exhibited high sensitivity to λ and β, where incremental coefficient increases led to non-linear margin deterioration. Mathematically, optimal pricing proved nearly inelastic to carbon price fluctuations, suggesting that production costs and demand coefficients dominate the profit function's Hessian matrix. Model C maintained lower pricing for new ($370,219) and refurbished items ($220,163) compared to Model M ($555,109 and $330,081). This study demonstrates that direct distribution mitigates “double marginalization” in multi-tier chains. Mathematically, firms should prioritize optimizing market parameters (λ, β) over carbon-cost mitigation. Furthermore, policymakers must recognize that cap-and-trade programs may drive industries toward vertical integration to achieve mathematical optimality.

Keywords

Collaboration network of the authors

14 authors · 27 co-authorship links

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  • Universitas Sulawesi Tenggara
  • Affiliation unknown
  • Different organisations
  • Same organisation
  • Affiliation unknown
  • Thicker line = more joint articles · bigger circle = more articles
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Co-authorOrganisationJoint articles
Vika Yugi KurniawanAffiliation unknown2
Dewi Retno Sari SaputroAffiliation unknown1
Andjani Ayu Cahaya TanjungAffiliation unknown1
Putri WulandariUniversitas Sulawesi Tenggara1
Purnami WidyaningsihAffiliation unknown1
Anas IvanniAffiliation unknown1
Sutanto SutantoAffiliation unknown1
Nabiella Zahra RizkitaAffiliation unknown1
Bayu PurboutomoAffiliation unknown1

Affiliations come from OpenAlex; journal OAI-PMH metadata carries none. Authors without an OpenAlex ID are matched by name, which can merge or split people.

Metadata source: OAI-PMH (metadata jurnal) https://online-journal.unja.ac.id/index.php/JIITUJ/oai, first harvested 5 Nov 2026, last seen 5 Nov 2026.
Original metadata (oai_dc) 
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	<dc:title xml:lang="en">REFURBISHING SUPPLY CHAIN OPTIMIZATION UNDER CAP-AND-TRADE POLICY: A COMPARATIVE ANALYSIS OF DISTRIBUTION CHANNEL STRATEGIES</dc:title>
	<dc:creator xml:lang="en">Pratama, Yogi Pasca</dc:creator>
	<dc:creator xml:lang="en">Kurdhi, Nughthoh Arfawi</dc:creator>
	<dc:creator xml:lang="en">Sistriatmaja, Muhammad Bagus</dc:creator>
	<dc:creator xml:lang="en">Oktora, Beny Trias</dc:creator>
	<dc:creator xml:lang="en">Geisth, Salju Indara Zeith</dc:creator>
	<dc:subject xml:lang="en">Cap-and-Trade Policy</dc:subject>
	<dc:subject xml:lang="en">Distribution Channel Optimization</dc:subject>
	<dc:subject xml:lang="en">Mathematical Modeling</dc:subject>
	<dc:subject xml:lang="en">Profit Maximization</dc:subject>
	<dc:subject xml:lang="en">Refurbishing Supply Chain</dc:subject>
	<dc:description xml:lang="en">To advance the circular economy, refurbishing activities are essential to mitigate industrial waste. While cap-and-trade policies regulate greenhouse emissions, their mathematical interactions with refurbishing distribution strategies remain under-researched. This study assesses the implications of distribution structures on profitability under environmental constraints. Two multivariable optimization models were developed: Model C (direct distribution) and Model M (indirect distribution via a retailer). Objective functions were optimized for price and production volume under cap-and-trade constraints. A sensitivity analysis of 15 parameters employed partial derivatives to determine the profit function's rate of change relative to market potential (Q), price elasticity (λ), cannibalization (β), and carbon costs. Model C yielded a higher optimum value ($165,796) than Model M ($124,341). Sensitivity analysis identified Q as having the highest positive gradient. Conversely, profits exhibited high sensitivity to λ and β, where incremental coefficient increases led to non-linear margin deterioration. Mathematically, optimal pricing proved nearly inelastic to carbon price fluctuations, suggesting that production costs and demand coefficients dominate the profit function's Hessian matrix. Model C maintained lower pricing for new ($370,219) and refurbished items ($220,163) compared to Model M ($555,109 and $330,081). This study demonstrates that direct distribution mitigates “double marginalization” in multi-tier chains. Mathematically, firms should prioritize optimizing market parameters (λ, β) over carbon-cost mitigation. Furthermore, policymakers must recognize that cap-and-trade programs may drive industries toward vertical integration to achieve mathematical optimality.</dc:description>
	<dc:publisher xml:lang="en">LPPM Universitas Jambi</dc:publisher>
	<dc:date>2026-02-19</dc:date>
	<dc:type>info:eu-repo/semantics/article</dc:type>
	<dc:type>info:eu-repo/semantics/publishedVersion</dc:type>
	<dc:format>application/pdf</dc:format>
	<dc:identifier>https://online-journal.unja.ac.id/JIITUJ/article/view/52985</dc:identifier>
	<dc:identifier>10.22437/jiituj.v10i1.52985</dc:identifier>
	<dc:source xml:lang="en">Jurnal Ilmiah Ilmu Terapan Universitas Jambi; Vol. 10 No. 1 (2026): Volume 10, Nomor 1, February 2026; 268-291</dc:source>
	<dc:source>2580-2259</dc:source>
	<dc:source>2580-2240</dc:source>
	<dc:language>en</dc:language>
	<dc:relation>https://online-journal.unja.ac.id/JIITUJ/article/view/52985/23804</dc:relation>
	<dc:rights xml:lang="en">Copyright (c) 2026 Yogi Pasca Pratama, Nughthoh Arfawi Kurdhi, Muhammad Bagus Sistriatmaja, Beny Trias Oktora, Salju Indara Zeith Geisth</dc:rights>
	<dc:rights xml:lang="en">https://creativecommons.org/licenses/by/4.0</dc:rights>
</oai_dc:dc>