Sustainable inventory model for price and credit-dependent demand with carbon emissions cap and trade

Abstract

This presented article considers sustainable inventory policies and trade credit. Demand varies because of the trade credit period and selling price provided by retailers to consumers. Under the carbon cap-and-trade and carbon tax protocols, it is also affected by environmental sensitivity due to carbon emissions generated by consumers. Therefore, in this article, demand is dependent on selling price, credit period, and total carbon emissions. Decision inventory models are created under three different cases: without regulations, with carbon tax regulation, and with carbon cap-and-trade regulations. Then the obtained results are analysed using the numerical examples to validate the proposed model. Using sensitivity analysis, graphs are presented to check the outcome of parameters on the defined decision variables. The report concludes with its findings and a prediction for potential future research.