A Sustainability-Driven Production Model Considering Lightweight Packaging and Warehouse Design Under Cap-and-Trade Regulation

Objectives: To construct and evaluate a production inventory model that incorporates sustainability factors including package, warehouse design, and renewable energy adoption in order to reduce carbon emissions under cap-and-trade regulation. Method: An economic production quantity model along with carbon emissions is developed under two circumstances: (i) sustainable production model integrating lightweight packaging and energy efficient warehouse operations under cap-and-trade regulation (ii) production inventory model with on-site and off-site emissions under cap-and-trade regulation. Closed-form mathematical formulations are derived for the overall annual costs. To demonstrate the effectiveness of the suggested model, feasible parameter values were sourced from industry references and Daryanto’s research. Findings: The suggested sustainable production inventory model shows that combining weight-optimized packaging and energy-saving warehouse practices greatly enhances both financial and ecological outcomes. Compared to model II, the overall cost reduces by 2.5% and overall emission quantity drops by 11.6%. These findings indicate that adopting sustainable approaches reduces emissions and operational expenditures without requiring extra production investment. As a result, the proposed model offers stakeholders a practical framework for striking a balance between cost efficiency and environmental stewardship in industrial operations. Novelty: This study is the first deterministic economic production quantity model to systematically incorporate three sustainability criteria within a carbon cap-and-trade system. 2020 Mathematics Subject Classification: 90B05. Keywords: Cap and Trade Regulation, Economic Production Quantity Model, Lightweight Packaging, Sustainability, Warehouse Design