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<p>Balancing sustainability with operational efficiency is a significant challenge in high-precision industries, including aerospace, pharmaceuticals, and electronics. Traditional Economic Production Quantity (EPQ) models often overlook factors such as the integrality of produced items, defective products, strict inspection, remanufacturing, and government-supported green investments, which limit their relevance in situations with inspection bottlenecks. This study develops EPQ models that integrate 100% inspection, scrap and rework, carbon-reducing green technologies, and government subsidies to achieve cost-efficient and sustainable production. The methodology involves formulating mathematical models under the EPQ framework, incorporating (i) inspection delays as production bottlenecks, (ii) defective items managed through remanufacturing, and (iii) green investment initiatives offset by government incentives. Total cost functions are defined to include setup cost, holding costs for perfect and reworkable items, production and rework costs, and net green investment cost. Due to the discrete nature of the produced items, mixed-integer optimization problems are formulated. Dealing with the integrality characteristic of the lot size in EPQ models, closed-form solutions are derived to determine the optimal production quantity and green investment. An important criterion is developed for the manufacturer to measure which incentives scheme between investment- and performance-based subsidies incurs more to invest in green technology adoption. Numerical illustrations using MATLAB, LINGO, and Python validate the models, while sensitivity analysis evaluates the impact of key parameters on cost efficiency and business strategies. The results align with the expectation that integrating government incentives into green investment decisions significantly reduces total system costs and carbon emissions. This study incorporates government incentives, green investment, and remanufacturing into EPQ models with strict inspection, enabling industries to reduce costs, adopt sustainable practices, and align with development goals while bridging economic performance and environmental responsibility.</p>

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Managing Remanufacturing, Inspection, Carbon Emissions and Green Technology Implementation Under Government Subsidy in Sustainable Production Systems

  • 期刊论文

  • 发表日期：

    2026年4月30日

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  • Md Rakib,
  • Md. Al-Amin Khan

摘要

Balancing sustainability with operational efficiency is a significant challenge in high-precision industries, including aerospace, pharmaceuticals, and electronics. Traditional Economic Production Quantity (EPQ) models often overlook factors such as the integrality of produced items, defective products, strict inspection, remanufacturing, and government-supported green investments, which limit their relevance in situations with inspection bottlenecks. This study develops EPQ models that integrate 100% inspection, scrap and rework, carbon-reducing green technologies, and government subsidies to achieve cost-efficient and sustainable production. The methodology involves formulating mathematical models under the EPQ framework, incorporating (i) inspection delays as production bottlenecks, (ii) defective items managed through remanufacturing, and (iii) green investment initiatives offset by government incentives. Total cost functions are defined to include setup cost, holding costs for perfect and reworkable items, production and rework costs, and net green investment cost. Due to the discrete nature of the produced items, mixed-integer optimization problems are formulated. Dealing with the integrality characteristic of the lot size in EPQ models, closed-form solutions are derived to determine the optimal production quantity and green investment. An important criterion is developed for the manufacturer to measure which incentives scheme between investment- and performance-based subsidies incurs more to invest in green technology adoption. Numerical illustrations using MATLAB, LINGO, and Python validate the models, while sensitivity analysis evaluates the impact of key parameters on cost efficiency and business strategies. The results align with the expectation that integrating government incentives into green investment decisions significantly reduces total system costs and carbon emissions. This study incorporates government incentives, green investment, and remanufacturing into EPQ models with strict inspection, enabling industries to reduce costs, adopt sustainable practices, and align with development goals while bridging economic performance and environmental responsibility.