Optimizing supply chain model for two level credit policy with reverse logistics

Environmental concerns have led to increasing awareness among consumers and companies about saving the environment. Firms and companies are aiming at product recycling, waste reduction techniques, and safe scrapping of expired items. Various government policies have been implemented to promote recycling or remanufacturing of items. Two-level credit policy ensures to allure more customers, increased sales, and hence business growth. In this paper, the optimal value of total cost under forward and backward supply chain systems is evaluated. This paper depicts the impact of two level credit policy on the inventory including manufactured as well remanufactured items with a specific demand pattern. Numerical examples and graphs are furnished to support the remarkable characteristics of the results. Sensitivity analysis is done to display how different parameters influence the inventory model. The findings of this paper indicate that the total average cost of manufacturing is affected by the manufacturing cost, ordering cost and the set up cost, whereas the total average cost of remanufacturing is affected by the purchasing cost and the ordering cost.