Sustainable and Green Inventory Policies in EPQ Models for Deteriorating Items

Abstract

This paper examines the incorporation of sustainability into inventory management, with particular emphasis on Green Economic Production Quantity (EPQ) models for perishable products. Conventional EPQ models, aimed at maximizing production quantity and cost-effectiveness, often neglect the environmental ramifications of production and inventory management, particularly for perishable items such as food, medicines, and chemicals.  Conversely, Green EPQ models include environmental factors, like carbon footprint reduction, waste management, and energy-efficient manufacturing, while ensuring economic efficiency. These models prioritize the reduction of spoilage, the mitigation of carbon emissions, and the prolongation of product shelf life using technology such as renewable energy and sustainable preservation techniques. The research indicates that Green EPQ models may markedly diminish waste, decrease carbon emissions, and provide more cost savings relative to conventional models, with enhancements such as a 50% increase in waste reduction, a 29% decrease in carbon emissions, and a 50% increase in overall cost savings.  Furthermore, these models facilitate the circular economy by allowing the remanufacturing of degraded goods, regaining as much as 75% of its value. The results underscore the capacity of Green EPQ models to reconcile environmental sustainability with economic objectives, offering enterprises a feasible route to more responsible and lucrative supply chain operations. The research advocates for more progress in real-time degradation monitoring and AI-driven demand forecasting to improve the efficacy of sustainable inventory methods.