Optimal investment in preservation technology for non-instantaneous deteriorating items under carbon emissions consideration

Abstract

Freshly, many countries have imposed carbon taxes on businesses in an effort to reduce emissions and regulate carbon pollution. As carbon emission is a principal contributor to climate change and is unavoidable, policymakers must work out a way to tax carbon emissions to lessen its impact and adapt themselves to the change. Carbon taxes are typically levied on a company that produces large amounts of carbon dioxide, and the tax is calculated based on the amount of emissions generated. As a source of carbon emissions, a metric is devised in our study to determine the optimal investment in preservation technology for non-instantaneous deteriorating inventory. The goal of preservation is not only to extend an item’s life span but also to limit the need for future intervention. In light of the above, an Economic Order Quantity (EOQ) model is more comprehensive if the preservation technology and carbon emissions are taken into account. Our proposed model caters to all these elements and aims to identify the optimal order quantity, cycle period, and preservation level for profit maximisation. The key point is that the preservation we focus on is not particularly for ongoing deterioration but also for a non-fixed delay interval before the deterioration process begins. The findings and sensitivity analysis reveal that investing in preservation technology has a profitable impact on a company, but an excessive level of preservation technology may have an adverse effect. The influences of some significant parameters are demonstrated through their applicability to managerial implications.