A sustainable inventory model for perishable items considering waste treatment for returning items

Abstract

Perishing of the items in an inventory model has always been a crucial issue for beverage companies. Besides, some items not only perish but also have specific expiration dates. To manage the inventory-in-hand, proposing a delay in payment is usually an appropriate solution. Also, beverage companies encounter sustainable policies that are regulated to dispose of waste without damaging the environment. These regulations lead companies to establish waste treatment units in their companies to purify the obsolete items before disposing of them. Despite the importance of this challenge in practice, no research has been made to contribute to these issues. To fill the mentioned gap in the literature, this paper proposes an inventory model for perishable items which: (a) items perish continuously and have specific expiration dates, (b) a single-level trade credit is offered to the customer to stimulate the demand, and (c) waste treatment policy is considered for the beverage company to purify the returning items before disposing of them. To develop our work in practice, the case study of Behnoush Beverage Company is considered and a real domain dataset is utilized. To validate the proposed mathematical model, a sensitivity analysis is developed. Eventually, managerial implications are outlined and the findings are concluded.