Green Inventory Model with Price Sensitivity Investment in Preservation Technology and Permissible Delay in Payment

Abstract

In contemporary inventory, integrating sustainability practices is paramount. This study proposes a Green Inventory Model that incorporates price sensitivity, investment in preservation technology, and permissible delay in payment. The model aims to optimize inventory decisions by considering the effects of deteriorating items, environmental impacts, and financial strategies. The inclusion of price sensitivity allows the model to adjust for variations in consumer demand based on pricing strategies. Investment in preservation technology is modeled to mitigate the deterioration rate of inventory, thereby reducing waste and enhancing sustainability. Additionally, the permissible delay in payment offers a financial incentive for retailers, potentially improving cash flow and reducing inventory holding costs. By integrating these components, the model provides a comprehensive approach to managing inventory in an eco-friendly and economically efficient manner. Numerical examples and sensitivity analysis are provided to illustrate the model's applicability and the impact of various parameters on the optimal solutions. The findings demonstrate that strategic investment in preservation technology, coupled with adaptive pricing and favorable payment terms, can significantly enhance both environmental sustainability and profitability in inventory operations.