<p>This study presents a sustainable production-inventory model for deteriorating products, with a primary focus on maintaining item quality through preservation technology investments and minimizing environmental impact via carbon emission taxes and green technology investments. Customer demand is modeled as price-dependent, while product deterioration is linked to the product’s maximum lifetime. A two-level trade credit policy is incorporated, where the supplier provides full trade credit to the manufacturer/retailer, and the retailer extends a partial trade credit period to the customers. Three models with five trade credit scenarios are analyzed, and an optimization algorithm is proposed to maximize total profit by jointly determining production time, selling price, and technology investments. Numerical examples and sensitivity analysis are provided to illustrate the theoretical results and offer managerial insights. The concavity of the total profit was verified through graphical analysis using MATLAB. The findings demonstrate that under the optimal trade credit arrangement, the retailer achieves a 0.49% profit gain from green technology investment and a 5.09% profit gain from preservation technology investment.</p>

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Optimal Analysis of a Production Inventory Model for Deteriorating Items with Maximum Lifetime and Two-Level Trade Credit Under Preservation and Green Technology Investment

  • S. Loganayaki,
  • K. Kirupa

摘要

This study presents a sustainable production-inventory model for deteriorating products, with a primary focus on maintaining item quality through preservation technology investments and minimizing environmental impact via carbon emission taxes and green technology investments. Customer demand is modeled as price-dependent, while product deterioration is linked to the product’s maximum lifetime. A two-level trade credit policy is incorporated, where the supplier provides full trade credit to the manufacturer/retailer, and the retailer extends a partial trade credit period to the customers. Three models with five trade credit scenarios are analyzed, and an optimization algorithm is proposed to maximize total profit by jointly determining production time, selling price, and technology investments. Numerical examples and sensitivity analysis are provided to illustrate the theoretical results and offer managerial insights. The concavity of the total profit was verified through graphical analysis using MATLAB. The findings demonstrate that under the optimal trade credit arrangement, the retailer achieves a 0.49% profit gain from green technology investment and a 5.09% profit gain from preservation technology investment.