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Abstract Considering the impact of emission on environment, over the last few decades, reduction of emission during production process (or emission free production process) appears to be one of the most growing preferences for every manufacturing firm. Again, manufacturing companies of different products are bounded to offer various facilities to their consumers in order to survive in the current highly competitive market situation. Primarily considering these two factors taken in to account, this study addresses an imperfect manufacturing inventory model in which customers' demand increases linearly w. r. to emission reduction level, service level from the manufacturer and decreases nonlinearly w. r. to price of the items. The analytical expressions of production rates, emission levels and service levels are derived by solving a number of optimum control problems using Hamiltonian maximum principle with a values for the business period and selling price. The basic goal is to maximize the average profit of the system. In addition, a number of numerical examples are considered to elaborate four distinct instances involved in the proposed model and these are solved numerically using teaching learning based optimization algorithm. Finally, sensitivity experiment is performed to investigate the influence of various system factors on the best‐found policies. The sensitivity analysis indicates that service rate provided by the manufacturer and selling price of the items impose a huge impact on the average profit of the system. Further, the carbon reduction affects the revenue of the system less significantly.
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