An integrated vendor-buyer model with sustainability and remanufacturing of returned product

Abstract

Carbon emission reduction is very crucial nowadays. A proper balance is required for carbon emission reduction and burning of fossils fuels because during fossil fuel burning carbon is emitted and it is essential for industrialization. This study presents an inventory model with green technology where production of new items and remanufacturing of returned items are allowed. Remembering the present global situation, the ordering cost is assumed as variable cost which contain order cancellation and reorder cost. Online order policy is considered with quality of product and a return rate. Keeping in mind the social, economic and environmental aspects, the demand function is considered as sustainability sensitive demand. A nonlinear model is designed based on the above concepts. The model is solved both theoretically and analytically. The main motives of the work are to find the effects of ordering cost, carbon emission cost and green technology investment on the inventory model for suggesting the best policy to the inventory manager. Sensitivity analysis is performed to validate the model. The numerical results prove that ignoring ordering cost, carbon emission cost and green technology investment can lead to a false optimal solution and this can be a huge economical loss for the inventory manager. The results also prove that a sustainable model with carbon emission and green technology investment is more realistic and profitable in compare with the other existing models.