EFFECTS OF MULTIPLE PREPAYMENTS AND GREEN INVESTMENT ON AN EPQ MODEL

Abstract

In this paper, an Economic Production Quantity (EPQ) model is formulated with an investment in green operations and deterioration. In the proposed model, the demand rate depends on selling-price as well as green concerning level of the products. The main objective of the study is to find an optimal replenishment time and an optimal green concerning level by considering profit maximization. The effect of multiple prepayments is depicted with a figure. Applying green operation, the manufacturer attracts more customers to earn more profits. Not only that, profit also increases, if the fraction of purchasing cost is paid as multiple prepayments will increase. Multiple prepayments give relief to the customer to gather a huge amount of money at a time that increases the sell of the product. Multiple prepayments generate a surplus cash ow to run the business. Carbon emission is included. Carbon tax is calculated, and government subsidy for green investment is included. A mathematical model is formulated and analysed by considering numerical examples to describe the real-life problems and to give solutions of that problem. Sensitivity analysis with respect to major parameters is performed to analyse the stability of the model. The paper ends with conclusions and a possible outlook of future research directions.