EOQ models for a coordinated two-level international supply chain considering imperfect items and environmental impact

► A production-shipment coordination policy for a two-level supply chain is studied. ► It is assumed that there is a percentage of defective in the supplied items. ► Three different supply chains are investigated: ► 1. Domestic; 2. International; and 3. International considering CO2 emission costs. ► Coordination policy changes with exchange rate volatility and CO2 emission costs.