Abstract
Maintaining product quality and environmental performance are emerging concerns in modern competitive and transparent businesses. Many retailers separate perfect products from imperfect ones to ensure product quality and endeavor to achieve carbon dioxide (CO2) reduction through green technology investments and sustainable inventory planning. Product deterioration often badly hampers the retailing business; hence, suitable preservation technologies are used. In this study, we examined the optimization model of the selling price, investment, and replenishment planning to maximize the total profit. The proposed model considered the effect of a greater deterioration rate and discount price of imperfect products. Due to the high uncertainty in demand, a realistic holding cost was deliberated with a variable and constant part. Every time the retailer transports purchased items, greenhouse gases (GHGs), including CO2, are produced. Government regulations on CO2 minimization and customer awareness for greener products stimulate retailers to invest in energy-efficient green technology. This study simultaneously showed a harmonious relationship among the attributes of preservation technology, green technology investment, and discounts on defective items. Theoretical derivations were performed with numerical analysis.
Highlights
The emerging intensity of the present world’s economy continually compels adjusting the economy’s configurations, which hints at massive pressure on the energy demand
Our study extended the model from Mishra et al [4,51], which combined the investment in green technology and preservation technology for deteriorating items
This study showed that the rate of imperfect items had a significant effect on the total profit, which is similar to results found in previous research, such as Vishkaei et al [16]
Summary
The emerging intensity of the present world’s economy continually compels adjusting the economy’s configurations, which hints at massive pressure on the energy demand. Our study considered the joint effects of price and carbon reduction on customer demand similar to Lou et al [7]; we proposed different demand patterns between the perfect and the imperfect quality products due to a discount price being charged for the imperfect products. This study aids retail managers to make optimum decisions on replenishment, selling price, and technology investment to maximize the total profit when a carbon emission tax is charged, deterioration and defective products affect the inventory level, and demand is sensitive to price and emission reductions. We studied a synergy on the reduction in product deterioration and carbon emissions for both the perfect and imperfect quality products This introduction section is followed by a literature review.
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