Sustainable production inventory management through bi-level greening performance in a three-echelon supply chain

Recently, different greening activities in various steps of a supply chain are being used to keep a system sustainable. As a result, it creates a terrific business opportunity for a business concern. In such a direction, the present study develops a supplier-manufacturer-retailer green supply chain model under a bi-level greening performance. The first level of a greening performance is in the raw-materials delivered by a supplier, while the second level is in the production process of the manufacturer’s production house. The novelty of this model is that stocking decision has been taken on the basis of levels of these greening activities. Also, here the supplier offers a credit period to the manufacturer based on the quantity and quality of the raw-materials ordered by him/her, whereas the manufacturer forwards a credit period, which has been assumed as type-2 fuzzy in nature to tackle a non-random uncertainty, to the retailer. Under such a fuzzy uncertain environment, a new defuzzification process has been proposed to get the optimal solution of the model. Comparing different scenarios of the proposed model, our findings reveal that although bi-level greening performance is beneficial from the perspective of the whole supply chain, it is less profitable from the manufacturer’s point of view. It also reveals that bi-level greening activity positively impacts the credit policy of supply chain members. On the sustainability issue, the imperfect production has a negative impact on economic and environmental performances. Finally, several practical managerial implications have been provided to make a decision on bi-level greening performance.