A Carbon-Tax-Based Dual-Warehouse Inventory Model with Deterioration and Investment in Preservation Technology

This study develops an inventory model for deteriorating products within a dual-warehouse system under carbon tax regulation. The framework is motivated by supply chains for perishable goods where storage constraints, product deterioration, environmental costs, and financing decisions arise simultaneously. The model considers an owned warehouse and a rented warehouse with higher holding cost, where the rented facility is utilized first. To capture realistic operational conditions, the model integrates time-dependent holding costs, trend-based demand, preservation technology investment to reduce deterioration, and a two-tier trade credit scheme. Carbon tax is incorporated as an environmental cost component, while preservation technology directly influences the deterioration rate, creating a trade-off between investment and waste reduction. The proposed model is examined through numerical analysis based on parameter settings representative of perishable products such as organic dairy items. The objective is to determine the optimal replenishment cycle time, preservation investment, and order quantity that minimize the total cost within the dual-warehouse system. Numerical results indicate an average optimal cycle time of approximately 0.57 years, preservation investment of about 1.32 dollars, and order quantity near 459 units. The average total cost is around 1056 dollars, with a minimum observed cost of approximately 964 dollars. The findings highlight the significant impact of preservation technology and carbon taxation on profitability and sustainability.