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A sustainable inventory system with price-sensitive demand and carbon emissions under partial trade credit and partial backordering

Author

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  • Ata Allah Taleizadeh

    (University of Tehran)

  • Leila Aliabadi

    (University of Tehran)

  • Park Thaichon

    (Griffith University)

Abstract

Companies and governments are actively looking for methods of curbing global warming. Management of inventory systems while considering environmental issues is an important problem. Therefore, this paper explores an Economic Order Quantity model by incorporating environmental issues under partial trade credit and partial backordering. The selling price and carbon emission-dependent demand function is adopted in this paper. The paper first formulates an inventory model with an exogenous price under cap-and-trade and carbon tax mechanisms. The study then extends the proposed problem when the selling price is an endogenous variable. These models are formulated as a nonlinear programming problem of profit maximization, and they are optimized applying global optimization of signomial geometric programming. Further, numerical examples and sensitivity analysis are presented to examine the effects of different shortage rates, credit periods, carbon tax, and price on the retailer’s replenishment strategies.

Suggested Citation

  • Ata Allah Taleizadeh & Leila Aliabadi & Park Thaichon, 2022. "A sustainable inventory system with price-sensitive demand and carbon emissions under partial trade credit and partial backordering," Operational Research, Springer, vol. 22(4), pages 4471-4516, September.
    • Handle: RePEc:spr:operea:v:22:y:2022:i:4:d:10.1007_s12351-021-00683-w
    DOI: 10.1007/s12351-021-00683-w
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    Cited by:

    1. C. K. Sivashankari & R. Valarmathi, 2023. "Optimal pricing and production lot-size policies in imperfect production system with price-sensitive demand, reworking, scrap, and sales return," Operational Research, Springer, vol. 23(3), pages 1-28, September.
    2. Ajoy Hatibaruah & Sumit Saha, 2023. "An inventory model for two-parameter Weibull distributed ameliorating and deteriorating items with stock and advertisement frequency dependent demand under trade credit and preservation technology," OPSEARCH, Springer;Operational Research Society of India, vol. 60(2), pages 951-1002, June.

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