Impact of Preservation Technology Investment and Order Cost Reduction on an Inventory Model Under Different Carbon Emission Policies

Abstract

AbstractA product’s preservation is a key issue in the inventory control system because it prevents deterioration of the product while it is stored in a warehouse or showroom. In today’s highly competitive business all organizations try to reduce carbon emission and deterioration to make their business sustainable. This study developed a joint effect of preservation technology investment and order cost reduction under different carbon emission regulation policies in an inflationary environment. Because inflation becomes the most realistic approach in inventory modeling, we can’t ignore it. So, in this paper, preservation technology is applied and taken as a decision variable. The main aim of this study is to make a sustainable inventory model and provide the best technique to reduce carbon emissions. To validate the model three different numerical examples are carried out. From sensitivity analysis, we obtain that under carbon taxation, reducing carbon emissions should have better benefits. A numerical illustration is carried out by using Software Mathematica 12.0. Sensitivity is carried out to see the behavior of different parameters on the total profit.KeywordsPreservation technology investmentOrder cost reductionInflationShortagesSelling priceTime-dependent demand