A dual greening three-echelon CLSC model under a stochastic environment

This paper proposes a novel production-inventory framework for a closed-loop supply chain (CLSC) system that strategically integrates green practices under a stochastic environment. The model encompasses four key entities: a manufacturer, a distributor, a retailer, and a third-party remanufacturer. It accounts for uncertainties in lead time, market demand, return quantity, and inspection errors, thereby enhancing the model’s robustness and applicability. The framework introduces dual greening mechanisms: soft and hard greening to evaluate their differential impacts on supply chain performance and environmental outcomes. The model explicitly incorporates carbon emissions resulting from production, inventory holding, and transportation activities, which are subject to a government-imposed emission cap. Furthermore, the model offers valuable insights into the decision-making process involving the implementation and trade-offs between soft and hard greening strategies. The proposed CLSC model balances environmental sustainability with economic efficiency. Numerical and sensitivity analyses reveal that: Greening in the early stages can be efficient with the implementation of soft greening, whereas hard greening becomes more cost-effective as the remanufacturing system matures; Distributor-level inventory optimisation enhances mid-echelon responsiveness and reduces total system cost. These findings provide actionable managerial insights for firms aiming to implement green investments strategically while complying with emission regulations.