Inventory control and supply chain management: A green growth perspective

Green growth is becoming an important mode for the sustainable operation of economy and society in the world. All countries are developing innovative methodologies to achieve green growth. Particularly, inventory and pricing are important technologies for companies' leadership to make decisions. The increasingly polluted environment has made sustainable utilization of resources and environmental protection more urgent, however, there is very little literature studying inventory and pricing from a green growth perspective. To fill this gap, we consider both inventory and pricing decisions for companies under different green growth mechanisms. We first consider the single period inventory model with a remanufactured supplier and the government subsidy for single and dual sourcing system, respectively, further derive the optimal order decisions for the retailer. Then, we assume the customers are environmentally sensitive and there is a green supplier in the market, examine the optimal pricing decisions for the retailer using the two-stage optimization method. We explore the value of the recycling supplier and government subsidy in the numerical study; furthermore, we examine the influences of the green degree of product on the optimal price decisions for different products. One interesting finding is that the retailer should order more green products no matter how expensive it is, as long as the customers in the market are environmentally sensitive.