Strategic lot-for-lot inventory and sustainability decisions in green supply chains: an analytical model with trade credit and cost-sharing

Purpose This study addresses critical challenges in inventory management, demand responsiveness and sustainability within modern supply chains. It investigates how lot-for-lot inventory policies, trade credit and cost-sharing can be integrated into a green closed-loop supply chain to enhance coordination, reduce costs and strengthen market responsiveness. The model explicitly links operational and financial strategies with marketing perspectives by incorporating consumer heterogeneity in green willingness-to-pay, retailer promotional tactics under trade credit and market segmentation effects, thereby connecting supply chain decisions to marketing intelligence, branding strategy and managerial practice. Design/methodology/approach A two-echelon green closed-loop supply chain, comprising a manufacturer and retailer, is modeled. The manufacturer follows a continuous production process, and the retailer faces deterministic demand based on price and greening level. Returned products are screened and either remanufactured or disposed of. Three models are developed: a basic model, one with trade credit and another combining trade credit with cost sharing. These models are analyzed under centralized, Stackelberg and Nash scenarios, utilizing numerical simulations and sensitivity analysis to evaluate the outcomes. Findings The results show that improving recycling efficiency enhances both environmental outcomes and profitability. Strategic trade credit terms improve cash flow coordination, while shipment frequency optimization reduces logistics and inventory costs. Cost-sharing mechanisms encourage greening efforts and demand, particularly in decentralized systems. Aligning sustainability initiatives with financial incentives fosters a balanced and competitive supply chain. Originality/value This research uniquely integrates environmental, financial and strategic dimensions in a lot-for-lot green closed-loop supply chain. It offers practical insights into how coordination mechanisms influence sustainability and profitability in competitive supply chain environments. By explicitly connecting green investment, trade credit and cost-sharing strategies to marketing outcomes such as segmentation, positioning and brand value, the study advances interdisciplinary understanding at the interface of operations management and marketing intelligence.