A sustainable production-inventory model with imperfect quality under preservation technology and quality improvement investment

Abstract

Abstract Incorporating qualities and environmental concerns have received significant attention in the literature on production and inventory management for deteriorating items; however, scarce papers have emphasized these two concurrently. Therefore, it is required to incorporate these two aspects for deteriorating items to fill this gap in the literature and provide a better insight into practice. This paper elaborates a sustainable production inventory model for poor quality deteriorating items which (a) items deteriorate at a constant rate and the deterioration progress can be controlled by investing in preservation technology; (b) carbon is emitted due to production operations, and it can be controlled by investing in carbon reduction technology; (c) a fraction of manufacture items are imperfect, and the quality can be enhanced by investing in quality improvement. The paper aims to discuss the impact of preservation and carbon reduction technologies on the total profit to help decision-makers make more efficient replenishment and pricing decisions. An algorithm is proposed to determine optimal values for five decision variables. A numerical experiment is illustrated to validate the mathematical formulation, and the impact of parameters on total profit and managerial insights are discussed using sensitivity analysis.