Optimizing Pricing, Pre-Sale Incentive, and Inventory Decisions with Advance Sales and Trade Credit under Carbon Tax Policy

Mei-Chuan Cheng, Hui-Chiung Lo and Chih-Te Yang ()
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Mei-Chuan Cheng: Department of Information Management, Fu Jen Catholic University, New Taipei City 242, Taiwan
Hui-Chiung Lo: Department of Business Administration, Tamkang University, New Taipei City 251, Taiwan
Chih-Te Yang: Department of Business Administration, Tamkang University, New Taipei City 251, Taiwan

Mathematics, 2023, vol. 11, issue 11, 1-18

Abstract: This paper aims to propose a comprehensive inventory model including pricing, pre-sale incentives, advance sales, trade credit, and carbon tax policies. The novelty of this study lies in its holistic approach to addressing these relevant and practical issues. The major purpose is to determine the optimal pricing, pre-order discount, and replenishment decisions to maximize the total profit under carbon tax policy. Through theoretical analysis, this study develops several theorems to demonstrate properties of optimal solutions and an easy-to-use algorithm to derive optimal solutions. Further, several numerical examples are provided to demonstrate the solution process for different scenarios and the effects of various parameters on optimal alternatives and solutions. This study provides companies management implications to address the challenges posed by the global movement to reduce carbon emissions while maintaining their profitability.

Keywords: inventory system; trade credit; advance sales; discount rate; carbon emission schemes; carbon tax (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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