An EOQ model for deteriorating products with green technology investment and trade credit financing

Dharmesh K. Katariya and Kunal T. Shukla

International Journal of Procurement Management, 2023, vol. 18, issue 3, 300-320

Abstract: Carbon reduction plays a significant role in encouraging green inventories and in market demand which is affected by products selling price. So, we considered green technology investment and selling price dependent linear demand in presented economic order quantity (EOQ) model. The retailer is permitted a specific period to acquire cash flow by supplier and hence, retailer gets more time for investing in green technology and managing sustainability. Sources of carbon emission from transportation and storing inventory process are considered, carbon tax regulation helps to manage carbon emission levels. Our aim to optimise the retailer's total profit at the optimal value of cycle time, selling price, and green technology investment cost for perishable deteriorating products with fixed expiry dates. Classical optimisation method is applied to determine the optimal value of decision variables. For the authentication of suggested model, numerical examples are taken, we have proved the concavity of the profit function of the system using a Hessian matrix method and graphically, and to generate managerial insights, the sensitivity analysis is done for each decision variable by changing the inventory parameters.

Keywords: inventory; expiration dates; carbon emission; carbon tax; green technology investment; GTI; sustainability; trade credit. (search for similar items in EconPapers)
Date: 2023
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