A Sustainable Inventory Model with Imperfect Products, Deterioration, and Controllable Emissions

Abu Hashan Md Mashud, Dipa Roy, Yosef Daryanto and Mohd Helmi Ali
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Abu Hashan Md Mashud: Department of Mathematics, Hajee Mohammad Danesh Science and Technology University, Dinajpur 5200, Bangladesh
Dipa Roy: Department of Mathematics, Hajee Mohammad Danesh Science and Technology University, Dinajpur 5200, Bangladesh
Yosef Daryanto: Department of Industrial Engineering, Universitas Atma Jaya Yogyakarta, Yogyakarta 55281, Indonesia
Mohd Helmi Ali: Faculty of Economics and Management, Universiti Kebangsaan Malaysia, Bangi 43600 UKM, Selangor, Malaysia

Mathematics, 2020, vol. 8, issue 11, 1-21

Abstract: Maintaining product quality and environmental performance are emerging concerns in modern competitive and transparent businesses. Many retailers separate perfect products from imperfect ones to ensure product quality and endeavor to achieve carbon dioxide (CO 2 ) reduction through green technology investments and sustainable inventory planning. Product deterioration often badly hampers the retailing business; hence, suitable preservation technologies are used. In this study, we examined the optimization model of the selling price, investment, and replenishment planning to maximize the total profit. The proposed model considered the effect of a greater deterioration rate and discount price of imperfect products. Due to the high uncertainty in demand, a realistic holding cost was deliberated with a variable and constant part. Every time the retailer transports purchased items, greenhouse gases (GHGs), including CO 2 , are produced. Government regulations on CO 2 minimization and customer awareness for greener products stimulate retailers to invest in energy-efficient green technology. This study simultaneously showed a harmonious relationship among the attributes of preservation technology, green technology investment, and discounts on defective items. Theoretical derivations were performed with numerical analysis.

Keywords: investment optimization; green technology; preservation technology; CO 2; imperfect item; deterioration (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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