A Sustainable Economic Production Quantity (EPQ) Inventory Model for Deteriorating Products with Circular Economic Indicator and Product Greening Level Dependent Demand Rate

Circular economy basically minimizes waste and maximizes resources. Natural resources are limited and need to be recollected and reproduced and reused. In this way natural resources are saved for future generations. Reproduction and reuse of products minimize waste and hence the release of carbon emission is controlled through the production and supply process. In the modern era, environmental concerns are widely observed by the customers and demand of green products increases. The present work proffers a profit maximization inventory production model where products are produced based on variable circularity index and greening level. Customer?s awareness about environmental impact of products and social responsibilities in the present era, customer?s demand and gross profit of the manufacturer are influenced by both circularity index and greening level of products. These outcomes are explored by linear form of demand and gross profit. Since operations involved production and supply chain management, environmental issues have become more of a concern in the inventory modelling system. Moreover, carbon emission produced due to activities like holding inventory, deterioration process and setup operations are considered to be sources of carbon emission. The objective of the present study is to maximize producer?s profit jointly with optimal circularity, greening level and production level of product under reduction of carbon emission to protect environment. Analytical results are explored in determining optimal profit and reduction of carbon emission. A numerical example is presented to investigate model applicability and to help managers in deciding parameters? behavioral patterns on the optimality strategies, an analysis is conducted.