Abstract: Based on decentralized coordination and centralized control of the vendor-managed inventory (VMI) supply chain, an integrated optimization model for the sustainable level of inventory transportation under the carbon cap policy is constructed to study the impact of the carbon cap policy on the performance of the sustainable supply chain. The Stackelberg method is used to construct a supply chain game model, and the sustainable level optimization decision-making processes are simulated in Matlab before and after the implementation of the carbon allowance policy. In order to adjust the spillover effects between suppliers and retailers, a supply chain coordination strategy based on revenue sharing contracts is designed. The results show that the carbon cap policy improves the sustainable levels of inventory and transportation, but has no effect on the service level. The total profit of centralized VMI supply chain increases monotonically with the carbon cap, while the total profit of the decentralized and coordinated VMI supply chain first rises and then decreases with the carbon cap. Regardless of the implementation of carbon cap policy or not, the total profit and sustainable levels of centralized VMI supply chain are greater than that of decentralized coordinated VMI supply chain.

Key words: carbon cap policy, sustainable level, inventory, transportation, vendor-managed inventory