ISSN: 2277-9655 [Ritha* et al., 6(4): April, 2017] Impact Factor: 4.116 IC™ Value: 3.00 CODEN: IJESS7 http: // www.ijesrt.com © International Journal of Engineering Sciences & Research Technology [685] IJESRT INTERNATIONAL JOURNAL OF ENGINEERING SCIENCES & RESEARCH TECHNOLOGY GREEN INVENTORY MODEL WITH VENDOR- BUYER ENVIRONMENTAL COLLABORATION TO ACHIEVE SUSTAINABILITY W. Ritha*, S. Haripriya * Department of Mathematics, Holy Cross College (Autonomous), Tiruchirappalli - 620002, India DOI: 10.5281/zenodo.569942 ABSTRACT In today’s competitive environment, it is extremely difficult to be successful without considering sustainability. Global warming impacts are becoming more observable in our daily life. Supply chain activities and many logistics activities are the important sources of carbon dioxide (CO2) emission and environmental pollutions. These issues have increased concerns to reduce CO2 emissions amount through the development of an inventory model. This paper incorporates environmental thinking into the inventory model to achieve sustainability .In this paper, we present a green inventory mathematical model which especially focuses on carbon cap-and-trade mechanism which is used to lower carbon emission in practice. One of the primary goals is to assess the environmental influence of various production and/or distribution approaches to reduce the greenhouse gases (GHG) emission through logistics activities. Finally, the paper concludes with a numerical example. KEYWORDS: carbon cap-and-trade, CO2 emission, environmental collaboration, green inventory, sustainability. INTRODUCTION Operations research has been recognised by many studies as an effectual tool to deal with CO2 emission in the design and planning of green supply chains. To date, a number of literature reviews have highlighted the contribution of operations research to green supply chain management with broader areas of focus. Business activities can pose a major threat to the environment in terms of carbon monoxide emissions, discarded packaging materials, scrapped toxic materials, traffic congestion and other forms of industrial pollution [22]. Green supply chain management received the highest attention in 2010 [12]. With these practices in mind, firms develop environmental management strategies in response to the changes of environmental requirements and their impacts on supply chain operations [6]. A supply chain is a network consists of all parties involved (e.g. supplier, manufacturer, distributor, wholesaler, retailer, customer, etc.), directly or indirectly, in producing and deliver products or services to ultimate customers – both in upstream and downstream sides through physical distribution, flow of information and finances [13]. Environmental collaboration is one of the initiative responses to environmental problems, focuses on environmental protection, and promotes synchronized development of economic and environment perspectives [11]. According to Ninlawan et al. [14] and Thoo et al. [20], green procurement, green manufacturing, green distribution and green logistics are vital dimensions of green supply chain management practices needed by manufacturing sectors to achieve enhanced sustainable performance. Green et al. [7] suggested that green supply chain management GSCM practices should include internal environmental management, green information systems, green purchasing, cooperation with customers, eco- design and investment recovery. The benefits that can be derived from environmental collaboration have been recognized in the green supply chain management literature [9] [15]. Research on carbon emission management is becoming a significant part of the green supply chain background as more businesses maintain to make it part of their business strategy, amid pressures from customers, competitors and regulatory agencies. The carbon tax mechanism and carbon cap-and-trade mechanism are the most efficient market-based options used to lower carbon emission in practice. Carbon emission trading is another efficient way to diminish carbon emission in which mandatory limit or cap is set on carbon emission over a specific time period and a total number of permits or carbon credits are allocated to firms by regulating institutions. Similar to other commodities, carbon trading takes place either through exchange or over the counter. If the amount of carbon emission by a firm exceeds its cap, the firm will have to buy credit from the carbon trading market. Otherwise, it