Sustainable Inventory Management for Environmental Impact through Partial Backordering and Multi-Trade-Credit-Period

Biswajit Sarkar, Waqas Ahmed, Seok-Beom Choi and Muhammad Tayyab
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Biswajit Sarkar: Department of Industrial & Management Engineering, Hanyang University, Ansan, Gyeonggi-do 155 88, Korea
Waqas Ahmed: Department of Industrial & Management Engineering, Hanyang University, Ansan, Gyeonggi-do 155 88, Korea
Seok-Beom Choi: Department of International Business, Cheju Halla University, Jeju-do 63092, Korea
Muhammad Tayyab: Department of Industrial & Management Engineering, Hanyang University, Ansan, Gyeonggi-do 155 88, Korea

Sustainability, 2018, vol. 10, issue 12, 1-28

Abstract: Incorporation of sustainable management for the rework of defective items brings long lasting benefits. In global business, there are situations when the products are procured from a global supplier. There are chances that the received lot may contain a fraction of imperfect products. These imperfect products are still valuable and can be repairable to save the environment. It is sustainable to repair imperfect items in a local repair store as compared to sending it back to the supplier. The cost of carbon emissions is also incorporated in the function to incorporate the environmental impact on total profit. Meanwhile, the supplier also offers a multi-trade-credit-period to the buyer. The developed model is sustainable and reduces the environmental impact as well as benefits for interim financing. This paper has an objective to maximize the total profit by developing a synergic economic order quantity model by considering multi-trade-credit policy, rework, and shortages simultaneously. This model can help in making decisions to enhance the performance of sustainable inventory management by controlling the cycle time and a fraction of time for a global supply chain. A non-derivative approach is employed to develop a closed-form optimal result. The numerical illustration with sensitivity analysis is also drawn to provide managerial insights into real practices.

Keywords: sustainable inventory model; defective items; environmental impact; shortages; multi-delay-in-payment; algebraic approach (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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