<p>In recent days, supply chain management is not only focusing on optimal policies, but also concerns on environmental effects. A two echelon joint replenishment model has been considered in this paper, where the buyer and vendor are located in different countries. By keeping environmental concern in mind, a variable and fixed carbon emission cost during transportation have been incorporated. Since the entities belong to different countries, their respective currencies and their stochastic exchange rate have been considered and they influence the decision policy. The holding cost at the vendor side is larger than the buyer side, so both parties decided to transfer the products to buyer side as soon as the inventory level reaches the particular level called lot-size. Furthermore, to avoid transportation frequency, an unequal shipment size pattern is incorporated which follows the geometric progression. The produced items might include defective products, that will be screened and will be sent to the second quality market as refurbished products. The cost function is nonlinear and it is a function of several variables which is very hard to solve using classical optimization methods. So we utilized Interior Point Algorithm to find the optimal values of this model such as lot-size, lot-size increasing factor, number of shipments, and total cost.</p>