Synergic effect of carbon regulation policies and multi-period credit financing in global retailing with reworking

Abstract

Carbon emissions regulation has become one of the most important priorities for the business sector these days to enhance customer satisfaction. Carbon emissions regulation in the retail sector is crucial to mitigate the industry's environmental impact. It promotes the company's adherence to emission standards by conducting environmentally friendly practices like energy-efficient operation and supply chain management. This study considers various carbon emissions regulation policies, especially with reworking which repairs the imperfect items in global retailing to enhance customer satisfaction. To detect defects, a machine-based autonomated inspection is used. Also, for active global retailing, multi-period credit financing is applied in the model. Under such multi-period credit financing and carbon emission regulations, we optimize cycle time, selling price, and investments for autonomated inspection and product biodegradability to maximize the profit of the retail industry. Nine different cases regarding the carbon emission policy and credit financing are studied and compared. We found that the retail industry will earn a maximum profit when cycle time is less than the first credit period under a limited carbon emissions policy which is at least 0.09% higher compared to other cases. Credit financing helps to increase the profit by 1.57%. Consequently, profit becomes the least when cycle time is greater than the second delay period under the carbon taxation policy.