Vendor-Buyer Green’s Inventory Model with Price Sensitive Demand under Inflation

Abstract

In the present scenario of globalization of products, it is nearly impossible for the organizations to rule the prices of their products. However, if the prices are lowered sales can be made to increase. Furthermore, the product’s price and the ordering size dominates its demand. The present study incorporates demand which relies on the product’s price. Considering the hazardous effect of the defective/waste products on the environment and with the increasing pressure on the firms from the government and various NGO’s for saving environment, adapting to green’s technology is a must for the firms. During the production process, there are numerous environment related issues which arise and need to be resolved throughout the inventory policy framing system. these issues not only decrease the financial development of the system but also tends to slow down the compatibility of the supply chain. The green’s inventory module in a supply chain is considered for the study. Supply chain is increasingly gaining importance in the market as the vendor and buyer both realize cost benefits. The aim in developing this framework is to analyze the vendor-buyer association in consideration with the price dependent demand on the greens technology in an inflation based environment. The material and the related manufacturing/producing processes are aimed for the better usage of the raw materials. This work studies the strategies for the partial delay in paying back by the retailer. It includes reusing, remanufacturing and recycling of the waste and deteriorated products in the inventory system. Two different approaches for the delay in paying back time S are considered, (i) S < cycle time and (ii) S > cycle time. The study accomplishes two major objectives: (a) reduce the wastage of the material in turn heading towards a greener manufacturing process and (b) aiming for a minimized cost value for the vendor and the buyer intending an optimal period for refilling the raw material. Numerical illustrations are done by  Mathematica  8.0 to characterize the results. Sensitivity analysis is conducted on respective values with table data and graph.