IS SOCIAL, ECONOMIC, AND ENVIRONMENTAL SUSTAINABILITY ESSENTIAL FOR INVENTORY MODELLING?

Abstract

Global warming and climate change have become sensitive issues worldwide, and many countries try to control CO2 emissions by investing in many projects. Businesses are increasingly transitioning from traditional entrepreneurial models to environmentally beneficial approaches prioritising social, economic, and environmental sustainability. This study develops an economic order quantity (EOQ) model for items deteriorating under a trade credit policy and shortages, considering factors such as waste management costs, carbon emissions, and the adoption of green and preservation technologies. The model also incorporates price- and advertising-dependent demand to capture real-world market dynamics. Numerical analysis validates the proposed model with graphical representations that illustrate the concavity of the decision variables. The findings reveal that insufficient investment in preservation technology leads to accelerated product deterioration and higher disposal costs, whereas optimal investment reduces disposal costs and enhances profitability. By adopting green technologies and preservation measures, businesses can effectively reduce carbon emissions, minimize operational costs, and align their strategies with sustainable development goals. These results are especially important for industries that deal with perishable products, providing practical guidance on how to balance environmental sustainability with economic benefits.