A Closed-Loop Supply Chain Inventory Model with Carbon Emissions and Green Technology Investment

Abstract

This paper proposes an inventory model that integrates a manufacturer and a retailer in a supply chain system. The model employs environmentally friendly technology investments to reduce the emissions produced in the process. Furthermore, the demand at the retailer's end is unpredictable, and green investments affect the average demand levels. This research aims to identify the optimal delivery lot, the number of deliveries, the Safety Factor, the level of green technology, and the collection level to maximize the joint total profit. Numerical examples illustrate the model's practical application, and algorithms are developed to solve the problem. Sensitivity analysis is used to determine the key model parameters' effect on the model's behavior. Green investments have been shown to reduce emissions and increase returns on second-hand goods, thus enhancing the environmental efficiency of supply chains.