Sustainable production-inventory system for perishables under dynamic fuel pricing and preservation technology investment.

Abstract

In the production and inventory management of perishables, environmental considerations are gaining prominence. By reducing carbon emissions from various supply chain processes, such as production, transportation, warehousing, and waste disposal of perishable items, the present study aims to minimize the overall cost to the manufacturer through an optimized investment in green technology. Additionally, cycle time and preservation technology investment are optimized to decrease deterioration and revenue loss in order to minimize cost. The originality of the present research lies in the following considerations. Due to an increase in fuel price, the transportation cost of every subsequent order will also increase, thus resulting in an increase of average delivery cost in a production cycle. We investigate the impact of changes in fuel prices on transportation costs and production inventory model policies due to the volatile nature of fuel prices. The function of transportation cost can be used to calculate transport costs in the future. The deterioration rate is a random variable with a double triangular distribution. Precisely, the demand for any product depends on the product's price; therefore, linear price-dependent demand is considered. Per unit production cost is a function of direct material cost, tooling cost, and manpower cost. Taking into account all the aforementioned parameters, this paper simultaneously optimizes green technology investment, preservation investment, and cycle time. To achieve the solution of the proposed sustainable production system, an optimization technique for the nonlinear function is employed. Finally, numerical experiments are conducted to validate the model. A special case of a numerical example demonstrates that the expected value of the total average cost is reduced by 10.723% when investments are made in both green and preservation technology, whereas investments in green technology alone result in a cost reduction of only 2.15%. Then, managerial implications and a discussion of findings are proposed after a sensitivity analysis that examines the model's response to key parameter variation. The study concludes with a discussion of the limitations of current work and possible future scopes.