Sustainable Supply Chain: A Quantitative Framework for Emissions, Inventory Control, and Financial Policies

The growing intricacy of contemporary supply chains has resulted in substantial environmental concerns, especially regarding carbon emissions, resource exhaustion, and inefficiencies in operations. This research presents a mathematical model that integrates inventory dynamics with sustainability considerations across a three-tier supply chain, comprising manufacturers, distributors, and retailers. The model accounts for critical factors such as production and replenishment cycles, demand satisfaction, deterioration rates, and holding costs, providing a comprehensive framework for optimizing inventory management. A key innovation of this study is the incorporation of carbon emissions into supply chain modeling, integrating regulatory policies such as carbon taxes and evaluating the role of emission reduction technologies (ERT). Additionally, trade credit policies, which influence financial and operational decision-making, are embedded within the model to examine their impact on cash flow, credit risk, and cost structures. The findings demonstrate that optimal replenishment schedules, emission reduction strategies, and credit policies can significantly enhance cost efficiency while reducing environmental impact. By offering a holistic approach to balancing economic and ecological objectives, this research contributes to the advancement of sustainable supply chain management, equipping decision-makers with actionable insights for achieving financial viability and regulatory compliance.