Optimizing solid waste, effluents and blockchain technology efforts towards a sustainable palm oil stochastic supply...

The palm oil supply chain (SC) faces increasing sustainability challenges due to environmental pollution, unreliable sustainability certifications, and uncertain market demand. In practice, demand for certified palm oil is stochastic and affected by sustainability efforts and certification credibility. These challenges highlight the need for integrated SC frameworks that jointly address demand uncertainty, certification authenticity, and sustainability decisions aimed at mitigating environmental pollution. The objective of this study is to analyse a two-layer palm oil SC model with stochastic demand by integrating blockchain-enabled certification verification, sustainability investment decisions, and carbon cap-and-trade regulation. Two scenarios, without and with blockchain adoption, are formulated and analytically compared. Sustainability investments and sales effort are incorporated into the model to evaluate environmental and economic performance. The average integrated profit of the SC is optimized with respect to shipment lot size, safety factor, and emission reduction rate, while identifying the optimal sustainability investments. The numerical examples, case analysis, sensitivity analysis, discussion of findings, and managerial insights are provided in the context of the palm oil industry. Findings show that implementing BT reduced unauthorized products in the SC. This resulted in 0.87% higher profit due to the increase in demand by 1.21%. Further, investments in waste minimization technology (WMT) and palm oil mill effluent treatment technology (POMETT) reduce solid waste and wastewater disposal costs by 99.65% and 99.26%, respectively. Correspondingly, the average integrated profit increases by 5.23% and 2.99%.