A sustainable supply chain model for time-varying deteriorating items under the promotional cost-sharing policy and three-level trade credit financing

Leyla Aliabadi, Seyed Hessameddin Zegordi (), Ali Husseinzadeh Kashan and Mohammad Ali Rastegar
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Leyla Aliabadi: Tarbiat Modares University
Seyed Hessameddin Zegordi: Tarbiat Modares University
Ali Husseinzadeh Kashan: Tarbiat Modares University
Mohammad Ali Rastegar: Tarbiat Modares University

Operational Research, 2024, vol. 24, issue 2, No 6, 59 pages

Abstract: Abstract This research develops a sustainable supply chain model for time-varying deteriorating items with customers’ credit period, customers’ credit amount, promotional efforts, and selling price-dependent demand. The model incorporates joint policies of promotional cost-sharing, three-level trade credit financing, and carbon tax. Under three-level trade credit financing, the supplier and the wholesaler offer some credit periods to the wholesaler and the retailer, respectively. As a result of this opportunity, the retailer allows customers to delay the payment of some portion of the total purchased amount. Here, shortages are assumed to occur in the form of partial backorder. The main objective of this investigation is to minimize the carbon emissions and maximize the joint profit of the retailer and the wholesaler simultaneously. To achieve this, the model is formulated as a Signomial Geometric Programming problem and solved efficiently using a global optimization method. The performance of the developed model and solution method is evaluated through several numerical examples and sensitivity analysis, providing valuable managerial insights. The computed results reveal that the optimal selling price varies depending on the nature of deterioration rates. Constant functions result in higher prices compared to linear and three-parameter Weibull functions. Coordination strategy and promotional cost-sharing policy among supply chain partners are shown to impact profits positively. Additionally, the wholesaler's credit period is a crucial factor influencing pricing decisions, logistics operations, and carbon emissions. The findings further demonstrate that extending the wholesaler's credit period under a carbon tax policy leads to a 26% increase in total joint profit, a 10% decrease in the wholesaler's carbon emissions, and a 21% decrease in the retailer's carbon emissions.

Keywords: Time-varying deteriorating items; Carbon emissions; Promotional cost-sharing; Three-level trade credit; Signomial geometric programming (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s12351-024-00824-x

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