A New Sustainable Economic Production Quantity Model with Imperfect Production and Shortage

Abstract Sustainability integrates business processes, efficiency, financial performance, and environmental impacts, posing an optimization challenge to minimize costs and greenhouse gas emissions. This study proposes a new sustainable economic production quantity (EPQ) model that incorporates environmental factors and accounts for variability in defective, repairable, and scrap products under stock-out case. The proposed model is applied to a real-life problem, and sensitivity analysis is analyzed in detail. The findings from the sensitivity analysis reveal that, following a 50% reduction in emission costs through green technology investments, total costs decreased by 9.457%. Simultaneously, production volume increased by 11.719%, while the maximum stock-out quantity declined by 2.031%.