An Inventory Model with Price-, Time- and Greenness-Sensitive Demand and Trade Credit-Based Economic Communications

Musaraf Hossain, Mostafijur Rahaman, Shariful Alam, Magfura Pervin (), Soheil Salahshour and Sankar Prasad Mondal
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Musaraf Hossain: Department of Mathematics, Indian Institute of Engineering Science and Technology, Shibpur, Howrah 711103, India
Mostafijur Rahaman: Department of Mathematics and Statistics, School of Applied Sciences and Humanities, Vignan’s Foundation for Science, Technology and Research, Guntur 522213, India
Shariful Alam: Department of Mathematics, Indian Institute of Engineering Science and Technology, Shibpur, Howrah 711103, India
Magfura Pervin: Department of Mathematics, Bangabasi Evening College, 19, Rajkumar Chakraborty Sarani, Kolkata 700009, India
Soheil Salahshour: Faculty of Engineering and Natural Sciences, Istanbul Okan University, Istanbul 34959, Turkey
Sankar Prasad Mondal: Department of Applied Mathematics, Maulana Abul Kalam Azad University of Technology, Haringhata 741249, India

Logistics, 2025, vol. 9, issue 3, 1-24

Abstract: Background: Price is the most authoritative constituent among the factors shaping consumer demand. Growing consciousness among global communities regarding environmental issues makes greenness one of the key factors controlling demand, along with time, which drives demand in markets. This paper addresses such issues associated with a retail purchase scenario. Methods: Consumer’s demand for products is hypothesized to be influenced by pricing, time and the green level of the product in the proposed model. Time-dependent inventory carrying cost and green level-induced purchasing cost are considered. The average cost during the decision cycle is the objective function that is analyzed in trade credit phenomena, involving delayed payment by the manufacturer to the supplier. The Convex optimization technique is used to find an optimal solution for the model. Results: Once a local optimal solution is found, sensitivity analysis is conducted to determine the optimal value of the objective function and decision variables for other impacting parameters. Results reveal that demand-boosting parameters, for instance, discounts on price and green activity, result in additional average costs. Conclusions: Discounts on price and green activity advocate a large supply capacity by boosting demand, creating opportunities for the retailer to earn more revenue.

Keywords: selling price; time- and greenness-dependent demand; time-dependent holding cost; deterioration; trade credit and back-ordering; total average cost optimization (search for similar items in EconPapers)
JEL-codes: L8 L80 L81 L86 L87 L9 L90 L91 L92 L93 L98 L99 M1 M10 M11 M16 M19 R4 R40 R41 R49 (search for similar items in EconPapers)
Date: 2025
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