Inventory Management With Deterioration and Trade-Credit Policy: A Path Toward Sustainability

Abstract

Background: This research tackles the difficulty of dealing with deteriorating inventory model with sustainably while optimizing the annual total cost for retailers. For economic and environmental equilibrium, the model incorporates preservation technology to alleviate the deterioration rate and includes trade-credit policy to minimize the total annual cost. Moreover, carbon emission reduction via green technology is included to prevent environmental pollution. Methods: A sustainable inventory model is designed by assuming demand rate and production level as linear functions of time. The optimal cycle length and optimal order quantity are obtained by allowing carbon emission rate as a controllable variable. Further, the model is solved with the assistance of classical optimization techniques. Results: Numerical illustrations highlight the managerial implications, showing that appropriate credit policies enhance financial performance and reduce resource wastage and environmental impact. Conclusion: The sustainable inventory model presented here provides a complete framework for achieving economic profitability and environmental accountability. It offers applicable knowledge to decision-makers to maximize order policies, manage carbon emissions and develop efficient trade-credit plans for a deteriorating inventory systems. © 2025 World Scientific Publishing Company.