Optimal green investments and replenishment decisions in vendor-managed inventory systems for non-instantaneous deteriorating products with partial backordering

Global warming is a big challenge in the current era. Investment in green technology may be useful to reduce the effects of carbon emissions on the environment. This model is designed for a two-level supply chain with a single vendor and buyer, a single non-instantaneous deteriorating product with green investment, and promotion-level-dependent demand. In a vendor-managed inventory (VMI) system, all inventory decisions are taken by the vendor instead of the buyer. In this study, we developed a VMI model and a traditional supply chain model with partial backlog shortages. The result shows that carbon emission reduction is directly proportional to green technology investment (GTI), while green technology promotion increases demand. The objective is to minimise the total cost per time unit of the supply chain and carbon emission cost with respect to the optimal green investment cost and replenishment cycle time. A numerical example and sensitivity analysis are provided for the validation of the proposed model, and the results show that the VMI model is better than the traditional supply chain model.