An inventory model with power demand and preservation technology investment under advanced and delayed payment policies

This study focuses on an inventory model for non-instantaneous, time-varying deteriorating items with preservation technology investment. The customer demand follows a power pattern function over time. During stockout periods, customer demands are partially backlogged. Additionally, the retailer pre-pays a certain amount of the purchasing cost as an advance payment to the supplier, with the balance paid at a later credit period. Three possible cases are identified based on the available credit period. The retailer incurs a carbon tax for each unit of carbon gas emitted during the processes of ordering, holding, and disposing of deteriorated items. The objective of the study is to minimise the total cost by determining the optimal cycle time, preservation technology investment, and positive inventory time. An algorithm is presented for the numerical optimisation of the proposed model. Sensitivity analysis is conducted to evaluate the impact of parameters on model outcomes, providing valuable managerial insights.