Simulation study reveals that integrating AI and green investment increases profits by 5.32% while reducing emissions by 12.01%, highlighting operational gains.
The transition toward circular and low-carbon manufacturing requires production systems that jointly address profitability, resource recovery, and emissions. This study develops a closed-loop production-inventory model under carbon taxation integrating recycling, green investment, and AI-enabled operational improvement. Three cases are examined: conventional production, recycling with green investment, and an integrated recycling-green-AI system. Green investment reduces emission intensity, while AI investment improves recovery efficiency and usable production by reducing defects. A hybrid analytical-computational approach, supported by multi-algorithm, sensitivity, and robustness analyses, is used to solve the model. Results show that Case 2 yields a modest profit increase of 0.15% but reduces emissions by 10.19%, whereas Case 3 increases average profit by 5.32% and reduces emissions by 12.01% relative to the baseline. Robustness tests confirm that these gains are mainly operational rather than demand-driven.
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Das et al. (2026) studied this question.
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