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A green inventory model with the effect of carbon taxation

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Abstract

Nowadays green retail practices are increasing in number. In this paper, an inventory model is formulated with retail investments in green operations including variable holding cost. In the proposed model, the demand rate depends on selling-price as well as green concern level. The main objective of the study is to find optimal replenishment time and optimal green concern level by considering profit maximization. Here, the effect of greening-level on purchasing-price and selling-price is shown. By investing in green operations, a retailer creates considerable impact on profitability. As the greening level increases, the profit of a retailer increases. Product with lower deterioration rate would increase the profit. Based on the above consideration, the mathematical model is designed by allowing carbon tax. Then, the model is explored by numerical examples. Mathematica software is used to obtain global maximum solution to the optimal cycle time and optimal greening-level. A sensitivity analysis with respect to major parameters is performed in order to access the stability of the model. The paper concludes with conclusions and an outlook of possible future directions is depicted.

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Authors and Affiliations

  1. Department of Applied Mathematics with Oceanology and Computer Programming, Vidyasagar University, Midnapore, West Bengal, 721102, India

    Asim Paul & Sankar Kumar Roy

  2. Department of Mathematics and Statistics, Kingston School of Management and Science, Barasat, Kolkata, West Bengal, 700126, India

    Magfura Pervin

  3. PESC-COPPE (Graduate School of Engineering) and Institute of Mathematics, Universidade Federal do Rio de Janeiro, Caixa Postal 68511, 21941-972, Rio de Janeiro, RJ, Brasil

    Nelson Maculan

  4. Faculty of Engineering and Management, Poznan University of Technology, ul. Jacka Rychlewskiego 2, 60-965, Poznan, Poland

    Gerhard-Wilhelm Weber

  5. Institute of Applied Mathematics, METU, Ankara, Turkey

    Gerhard-Wilhelm Weber

Authors
  1. Asim Paul
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  2. Magfura Pervin
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  3. Sankar Kumar Roy
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  4. Nelson Maculan
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  5. Gerhard-Wilhelm Weber
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Correspondence to Sankar Kumar Roy.

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Paul, A., Pervin, M., Roy, S.K. et al. A green inventory model with the effect of carbon taxation. Ann Oper Res 309, 233–248 (2022). https://doi.org/10.1007/s10479-021-04143-8

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