Proposing a new modeling to the VMI supply chain problem.Adding a VMI contractual agreement between the vendor and the buyer.Considering GHG emissions tax cost and limitation.Proposing a hybrid GA and ICA to solve the problem.Comparing the results with the ones obtained using a GA and lower bounds for validation. The purpose of this paper is to develop a multi-item economic order quantity (EOQ) model with shortage for a single-buyer single-supplier supply chain under green vendor managed inventory (VMI) policy. This model explicitly includes the VMI contractual agreement between the vendor and the buyer such as warehouse capacity and delivery constraints, bounds for each order, and limits on the number of pallets. To create a kind of green supply chain, tax cost of green house gas (GHG) emissions and limitation on total emissions of all items are considered in the model. A hybrid genetic and imperialist competitive algorithm (HGA) is employed to find a near-optimum solution of a nonlinear integer-programming (NIP) with the objective of minimizing the total cost of the supply chain. Since no benchmark is available in the literature, a genetic algorithm (GA) is developed as well to validate the result obtained. For further validation, the outcomes are also compared to lower bounds that are found using a relaxed model in which all variables are treated continuous. At the end, numerical examples are presented to demonstrate the application of the proposed methodology. Our results proved that the proposed hybrid procedure was able to find better and nearer optimal solutions.

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