38 Emerging Technologies Unveiled Applications of . . .

CHAPTER–4

Green Inventory Model with Stock

Dependent Demand and Partial
Trade Credit
–Nikita Goel1, SR Singh2, Anshika Gautam3 & Dipti Singh4

Abstract
For companies trying to strike a balance between the
competing goals of satisfying customer demand and cutting
expenses, effective inventory management is essential. The use
of trade credit and stock-dependent demand are two significant
components of the sustainable inventory model that this study
suggests. Enhancing the financial and environmental
sustainability of inventory management procedures is the goal
of integrating these [Link] reduce the deterioration
rate preservation technology is used in this model. Also, to
reduce carbon emissions investment in green technology is
[Link] illustration is carried out by using
Mathematica 12.0 for the validation of the model, conducting
sensitivity analysis provides valuable insights into the
robustness and flexibility of the model under various scenarios.
Keywords: Trade credit, Stock dependent Demand, Green
Technology, Preservation Technology.
1-4
Department of Mathematics, Chaudhary Charan Singh University Meerut,
India
Ema il: nikitagoel30 10@[Link], shivra jpundir@[Link],
anshikagautam850@[Link]
Correspondence email: singhdipti113@[Link]
Green Inventory Model with Stock Dependent Demand . . . 39

Introduction
Green inventory management is no longer a nice-to-have
but a need-to-have. businesses that ignore sustainability risk
falling behind competitors embracing greener practices and
may face regulatory challenges or increased costs. not
something likely to please customers, investors, and other
stakeholders. Trade Credit is an essential part of any business.
It is necessary for firms that do not have other means of
financing their operations (raising capital through debt/equity
financing or taking loans) available to them. It is also essential
for firms that are either just starting out their business or operate
on a much smaller scale. In the inventory control system,
preservation of a product is an important issue. It prevents the
deterioration effect of the products while these are stored in
the warehouse/showroom. The investment in preservation
technology is considered a decision variable to control the
deterioration quantity of an integrated [Link] is an important
factor to reduce the deterioration effect. Different business
enterprises/organization are bound to apply preservation
technology in inventory control [Link] the advent of
supermarkets, it was commonly acknowledged that vast
displays of stocks induce the customer into buying more. It is
commonly believed that large piles of goods displayed in the
super market will lead the customer to buy more. In the present
business scenario, a product becomes widely popular in the
society, when it is antagonistically promoted through the mass
media and/or by the attractive display of items in the
showroom at market place.
In this paper we developed a green inventory model for a
retailing business problem. In which the demand is depends
on stock level. To control the deterioration rate preservation
technology is taken into consideration. Also to reduce the
carbon emission green technology investment is taken into
consideration. Effect of inflation and trade credit is also taken
into consideration.
40 Emerging Technologies Unveiled Applications of . . .

Literature Review
The need to adopt sustainability has grown more and more
evident in the modern company and supply chain management
landscape. Businesses are realizing how crucial it is to include
eco-friendly measures into their daily operations. The creation
and application of “green” inventory models, which integrate
environmental factors with inventory management techniques,
is a fundamental aspect of this trend. This introduction explores
the idea of a Green Inventory Model, particularly how it might
be used with partial trade credit and integrated with stock-
dependent [Link] and Schrader (1963) first developed
mathematics for deteriorating items. Buzacott (1975) was the
first to incorporate the effect of inflation into the EOQ problem.
Alfares (2007) developed economic order quantity model with
stock dependent demand. Sana (2010) developed a multi-item
EOQ model that took into account time-varying and
salesperson dependent demand. Singh et al (2010) developed
inventory model with the effect of inflation. In which demand
is depends on stock. Jawla and Singh (2016) Dhandapani and
Uthayakumar (2017) developed a multi-item EOQ model. To
limit the rate of decay, they used a preservation mechanism.
Das and Roy (2018) incorporated the presence of impreciseness
into the EOQ model by considering the interval number. They
demonstrated that the total cost is greatest at the lower end of
the [Link] et al. (2019) developed an integrated model
by considering shortages, price-sensitive demand, and two-
level trade credit. Rani et al. (2019) considered the green supply
chain in a fuzzy environment. They assume that demand
depends on carbon depends on carbon levels. They applied
the signed distance method in order to defuzzify the cost
expression. Chakraborty et al. (2020) investigated how inûation
affected the multi-item inventory problem in two different
warehousing systems. They proposed that, in the context of
high inûation, order quantities be reduced to increase proût.
When demand is stock-dependent and price-sensitive, retailers
should deal with multi-items. Handa et al (2020) developed
inventory model with stock dependent demand and trade credit
Green Inventory Model with Stock Dependent Demand . . . 41
policy. When demand is stock-dependent and price-sensitive,
retailers should deal with multi-items, according to Barman
and De (2021). Recently, Singh and Singh (2022) developed
inventory model with preservation technology investment.
Handa et al (2023) developed sustainable inventory model with
trade credit.
The whole paper is divided into 8 sections. In the first
section introduction is given. In the section 2 Literature review
is given. In section 3 Assumption and notations are given. In
the section 4 model formulation of model is given. In the section
5 numerical illustration is given. In the section 6 concavity is
given. In the section 7 Sensitivity analysis is carried out. In the
section 8 observations are given. In the section 9 conclusion
and future extension are also given.

Assumptions & Notations

Assumptions
Following are the assumptions which are used in entire
chapter.
• Single items are considered in this paper.
• Demand is stock Dependent Dependent.
D = a + bI (t)
Where, a and b are Demand parameters.
• Effect of Inflation is taken into consideration.
• Trade credit policy is applied in this model.
• Investment in Preservation technology is taken into
consideration.
• Investment in Green Technology is also taken into
consideration.
• Lead time is zero.

Notations
Following are the notations which are used in entire chapter
is given in the Table 1.
42 Emerging Technologies Unveiled Applications of . . .
Table 1 : Notations used in the Whole Paper
Parameters Descriptions
A O rdering cost per order ( $/ Per order)
C Purchasing cost per unit (Rs)
?? Selling price per unit, p >c (Rs)
D Demand rate
a,b Demand scale parameter (Unit)
h holding cost par ameters ($ / Unit)
G Investment in green technologies to reduce carbon
emissions ($ )
Ie The interest rate earned by the retailer (In %)
Ip The interest rate paid by the retailer (In %)
Q Retailer’s or der quantity per cycle (Unit)
?? Initial Deter ioration ra te
λ(α) Deterior ation rate after using preservation technology. ($)
?? The sensitive parameter in deteriora tion rate when using
preservation technology
?? Rate of inflation
?? Percentage of the payment which is permitted to be delayed
when reta iler order , 0 = δ = 1
I1 t Inventory level during the time interval [0,T]
Decision Varia ble
T Replenishment cycle length (years)
?? Investment in preservation technology

Model Formulation
This model is developed for any retailing business. In which
the retailer order q unity quantity from the supplier. The
behavior of the inventory level is shown in figure 1.
dl1 (t )
 (b   )( ))I(t)   a , 0 t  T . . . (1)
dt
At t = T , I(t) = 0

a
I1(t) =  e[(B  ( ))T (b   ( ))t]  1  . . . (2)
b  ( ) 
At t =0 , I(t) = q
a
q=  e( b  ( ))T  1
b   ( ) 
Green Inventory Model with Stock Dependent Demand . . . 43

Fig. 1 Graphical Representation of Inventory

level with respect to Time.
Inventory Costs
1. Ordering Cost (OC) = Ae–rt
T
2. Holding Cost (HC) = c  e rt  I(t )dt
0

c a  e  IT  e( n  ( ))T e IT  1
= [  ]
b   ( ) b   ( )  r r
T
3. Deterioration Cost (DC) = c ( ) e  rt  I(t )dt
0

ac ( )  e rT  e(b   ( ))T e  rt  1

[  ]
b   ( ) B   ( )  r r
4. Green Investment (GI) = GT
5. Preservation Technology Investment = T
T
6. Sales Revenue (SR) = p  e  rt I (t )dt
0

pa e( n   ( ))T e  rT  1
[  e rt ]   ]
b   ( ) b   ( )  r r
7. There are two subcases which arise based on trade
credit period M.
Subcase (a) : 0  M  T
44 Emerging Technologies Unveiled Applications of . . .

IP1= ci p { (1   )a  bI (t )M [e ( )T  1]   e rt I (t )dt}

T

 ( ) M

a
cip{(1-)[aM (e()T–1] + bM b   ( ) e(b+2() )T-(b+())

a
e (b + () (T–M)– e()M +1] +
b   ( )

e( b  ( ))(T M) rM  e  rT e rT  erM

[  ]}
b   ( )  r r

M
IE1 = ie p{ 0 ( a  bI (t ))e rt t dt

Me  Mr 1  e Mr abe(b   ( ))T
= ie p( a( r

r2
) 
b   ( )

Me( b  ( ) r 1  e ( b   ( )  r) M
[  ])
(b  ( )  r) b   ( )  r

Subcase (b) : 0  T  M
(1   )( a  bI (t ) M  ( )T
IP2 = ci p { [e  1]}
 ( )

1   )aM( e ( )T  1) abM
 ci p [ 
 ( ) (b  ( )) ( )

 [eb  2  ( )T ( b  ( ))M  e b  ( )(T M)  e ( ) M 

 rT  rT  a  ye  u T
 
 I e p( ate  1  e2  abc  u 
r r [b  ye ]
Green Inventory Model with Stock Dependent Demand . . . 45

 u  u
  e[b ye  r]T 1  e[ b  ye  r ]T  ab
 
  [ b  ye  u  r [ b  ye  u  r ]2    u
  [b  ye ]

 e  rT 1  e  rT  a( M  T )(1  e rT )
    
 r r2  r
 u  u
ab( M  T )e[ b  ye ]T
1  e[ b  ye  r ]T
 ( )
[ b  ye u ] [ b  ye u  r ]

Total Relevant Profit (TP)

T P(P,T)
1
T P1(P,T) = (SR - OC - HC - DC - GT - PT - IP1 + IE1),
T
0MT

1 { ap [a( b  ( ))T  1]  A  c a
T P1(P,T) =
T b   ( ) b  ( )

 e  IT  e( b  ( ))T e  rt  1 ac( )
[  ]
b   ( )  r r b   ( )

 e  IT  e( b  ( ))T e rT  1
[  ]  GT   T  ci p (1   )
B   ( )  r r

a
[aM(e  ( )T  1]  bM [ e( b  2  ( )T ( b   ( ) M
b   ( )

a
 e( b   ( ))(T  M )  e ( ) M  1] 
b   ( )

e( b  ( ))( T  M ) rM  e rT e rT  e rM Me  Mr 1  e Mr

[  ]}  ie p( a(  )
b   ( )  r r r r2
46 Emerging Technologies Unveiled Applications of . . .

abe( b  ( ))T Me ( b   ( ) r ) 1  e( b  ( ) r ) M

 [  ]}
b   ( ) (b   ( )  r ) b   ( )  r

1
T P2 (P, T)= (SR - OC - HC - DC - GT - PT - IP2 + IE2),
T
0TM

1 ap c a
T P2 (P, T)= { [e( b  ( ))T  1]  A 
T b   ( ) b   ( )

e  rT  e( b   ( ))T e  rT  1 ac ( )  e rT  e( b  ( ))T e rT  1

[  ] [  ]
b   ( )  r r b   ( ) B   ( )  r r

(1   )aM( e ( )T  1 abM
GT   T  ci p { 
 ( ) ( b   ( ) ( )

[eb  2  ( )T ( b   ( )) M ]  e b  ( )(T  M )  e  ( ) M  1]}

 u
 aTe  rT 1  e  rT abe[b  ye ]T
 I e p(  
r r2 [b ye u ]

 u  u
  e[ b  ye  r ]T 1  e [ b  ye  r ]T  ab
  u
  u 2    u
 [ b  ye  r ] [ b  ye  r ]  [ b  ye ]

 e  rT 1  e  rT  a( M  T )(1  e rT )
  
 r r2  r

 u  u
ab( M  T )e[ b  ye ]T
1  e[ b  ye r ]T
 ( )
[ b  ye u ] [b  ye u  r ]

Numerical Illustration
To validate the model two numerical examples are carried
out.
Green Inventory Model with Stock Dependent Demand . . . 47
Example 1: Consider a business situation in which the input
parameters are given below. All the parameters are taken into
appropriate units (T > M)
c = 40, p = 100, a = 10 0, M = 0.4, b = 5, O = 5 00, r= 0.022,
= 0.3,= 0.0025, y = 0.001,= 0.9 , z = 0.09, = 0.1, G = 100, Ie
= 0.028, u = 0.036,

Optimal Solution
{Totat Profit = 24113.05 Rs, {T [Link],0.211654 $}}
Example 2: Consider a business situation in which the input
parameters are given below. All the parameters are taken into
appropriate units (T < M)
c = 40, p = 100, a = 100, M = 1, b = 5, O = 500, r = 0.022,
= 0.3,  = 0.0025, y = 0.001, = 0.9, z = 0.09,  = 0.1, G = 100, Ie
=0.028, u = 0.036

Optimal Solution is
Total Profit = 1.45851 × 108 Rs, = 0.211654 $, T = [Link]}}

Concavity
Concavity for both cases are given in fig. 2 and fig.3.

Fig.2. Concavity of Profit function with Respect to Cycle

length and Preservation Technology in case 1.
48 Emerging Technologies Unveiled Applications of . . .

Fig.3. Concavity of Profit Function with Respect to Cycle

Length and Preservation Technology in case 2.

Sensitivity Analysis
The impact of different parameters on optimal profit are
shown by table 2 and table 3
Table 2 Sensitivity Analysis in Case 1

Parameter % change Total Profit 

c +20% 326579. 0.211654
+10% 325341. 0.211654
-10 % 322864. 0.211654
-20 % 321625. 0.211654
+20% 386566. 0.211654
P +10% 355334. 0.211654
-10 % 292870. 0.211654
-20 % 261638. 0.211654
+20% 389043. 0.211654
A +10% 356572. 0.211654
-10 % 291632. 0.211654
-20 % 259162. 0.211654
+20% 329866. 0.211654
M +10% 327006. 0.211654
-10 % 321152. 0.211654
-20 % 318155. 0.211654
+20% 324002. 0.211654
?? +10% 324052. 0.211654
-10 % 324152. 0.211654
-20 % 324202. 0.211654
+20% 322400. 0.211654
R +10% 323174. 0.211654
-10 % 325236. 0.211654
-20 % 326653. 0.211654
(Contd...)
Green Inventory Model with Stock Dependent Demand . . . 49
Parameter % change Total Profit 
+20% 323035. 0.211654
Δ +10% 323568. 0.211654
-10 % 324636. 0.211654
-20 % 325170. 0.211654
+20% 324145. 0.211654
Y +10% 324124. 0.211654
-10 % 324081. 0.211654
-20 % 324059. 0.211654
Ip +20% 326593. 0.211654
+10% 325348 0.211654
-10 % 322857. 0.211654
-20 % 321612. 0.211654
+20% 324082. 0.211654
G +10% 324092. 0.211654
-10 % 324112. 0.211654
-20 % 324122. 0.211654
+20% 327555. 0.211654
Ie +10% 325828. 0.211654
-10 % 322376. 0.211654
-20 % 320650. 0.211654
u +20% 324101. 0.211654
+10% 324101. 0.211654
-10 % 324103. 0.211654
-20 % 324104. 0.211654

Table 2 Sensitivity Analysis for Case 2

Parameter % change Total Profit Α
c +20% 1767 23000 0.2116 54
+10% 1612 87000 0.2116 54
-10% 1304 15000 0.2116 54
-20% 1149 79000 0.2116 54
p +20% 1441 49000 0.2116 54
+10% 1450 00000 0.2116 54
-10% 1467 01000 0.2116 54
-20% 1475 52000 0.2116 54
 +20% 1750 21000 0.2116 54
+10% 1604 36000 0.2116 54
-10% 1312 65000 0.2116 54
-20% 1166 80000 0.2116 54
+20% 1741 09000 0.2116 54
M +10% 1599 83000 0.2116 54
-10% 1317 12000 0.2116 54
-20% 1175 65000 0.2116 54
(Contd...)
50 Emerging Technologies Unveiled Applications of . . .
Parameter % change Total Profit Α
+20% 1458 50000 0.2116 54
A +10% 1458 50000 0.2116 54
-10% 1458 51000 0.2116 54
-20% 1458 51000 0.2116 54
r +20% 1458 40000 0.2116 54
+10% 1458 45000 0.2116 54
-10% 1458 58000 0.2116 54
-20% 1458 66000 0.2116 54
+20% 1326 20000 0.2116 54
 +10% 1392 35000 0.2116 54
-10% 1524 66000 0.2116 54
-20% 1590 82000 0.2116 54
+20% 1200 99000 0.2116 54
y +10% 1318 04000 0.2116 54
-10% 1630 19000 0.2116 54
-20% 1844 78000 0.2116 54
Ip +20% 1767 23000 0.2116 54
+10% 1612 87000 0.2116 54
-10% 1304 15000 0.2116 54
-20% 1149 79000 0.2116 54
+20% 1458 51000 0.2116 54
G +10% 1458 51000 0.2116 54
-10% 1458 51000 0.2116 54
-20% 1458 51000 0.2116 54
+20% 1439 13000 0.2116 54
Ie +10% 1448 82000 0.2116 54
-10% 1468 20000 0.2116 54
-20% 1477 88000 0.2116 54
u +20% 1469 16000 0.2116 54
+10% 1463 83000 0.2116 54
-10% 1453 20000 0.2116 54
-20% 1447 91000 0.2116 54

Observations
1. On increases in the purchasing price ‘c’ total profit
increases in both the cases.
2. On increases in the selling price total profit ‘p’ increases
in case 1 but decreases in case 2.
3. On increases in the demand parameter ‘a’ the total
profit increases in both cases.
4. On increases in the trade credit period ‘M’ the total
profit increases in both the cases.
Green Inventory Model with Stock Dependent Demand . . . 51
5. On increases in the ordering cost ‘A’ the total profit
slightly decreases in both the cases.
6. On increases in the inflation rate ‘r’ the total profit
decreases in both the cases.
7. On increases in the percentage of the payment which
is permitted to be delayed when retailer order total
profit decreases in both the cases.
8. On increases in the initial deterioration rate the
increases in case 1 but decreases in case 2.
9. On increases in the interest charge the total profit
increases in both cases.
10. On increases in the investment in Green technology
the total profit slightly decreases in case 1 while there
is no change in case 2.
11. On increases in the interest earned rate the total profit
increases in case 1 but decreases in case 2.
12. On increases in the sensitive parameter in deterioration
rate when using preservation technology slightly
decreases in case 1 but increases in case 2.

Conclusion & Future Extension

In this paper we developed a green inventory model in
which demand is taken as stock dependent demand. To reduce
the deterioration rate investment in preservation technology is
done. Along with to reduce the carbon emission the investment
in green technology is done. Since trade credit play an important
role in today’s real world business situation. So, the effect of
trade credit is also taken into consideration in this paper. To
incorporate the trade credit in the paper there arises two case.
In the first case the condition is consider when the trade credit
period is less than the total cycle length. In the second case the
condition is consider when the trade credit period is greater
than the total cycle length. To validate the model numerical
example is carried out. For both the cases two numerical
examples are carried out by using the software
MATHEMATICA 12.0. From the numerical illustration we
revealed that the total profit is maximum in the second case.
52 Emerging Technologies Unveiled Applications of . . .
The impact of different parameters on optimal profit is are
shown by sensitivity analysis. This paper can be further
extended with stochastic demand rate, variable deterioration
rate, and with uncertain environment.

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