Shape-memory polymers (SMPs) are gaining significant attention for their ability to recover predefined shapes via external stimuli. Among thermally activated systems, biodegradable blends of polylactic acid (PLA) and polycaprolactone (PCL) are particularly promising for biomedical devices and soft actuators. This study develops a thermo-mechanical theoretical model to investigate the shape-memory behavior of a PLA/PCL composite blends under controlled thermal cycling. The framework integrates transient heat transfer, temperature-dependent elasticity, and viscoelastic dynamics to predict temperature evolution, deformation, and internal stress. The thermal response is computed via Newton’s law of convection, while the mechanical transition is described by a sigmoidal temperature and crystallinity-dependent Young’s modulus. Beam bending theory is employed to evaluate the spatial distribution of strain and stress. A parametric sensitivity analysis was performed to evaluate the influence of different parameters including the crystallinity grade, the convective heat transfer coefficient, glass transition temperature, and viscoelastic recovery constant. The theoretical study accurately reproduces the shape-memory cycle, quantifying performance through fixation and recovery ratios. This model provides a robust tool for the rational design and optimization of biodegradable smart polymer structures.