Environmental performance measures for supply chains

Purpose – The paper seeks to develop an analytical decision model that is used to investigate the performance of a supply chain when product, process, and environmental quality characteristics are considered. Design/methodology/approach – Environmental performance measures and methods to quantify quality are reviewed and then used to develop a method to measure environmental quality and its associated costs. This was translated into a two‐level supply chain coordination model that captures most aspects of green supply chains. Numerical examples are provided and solved using Excel Solver enhanced with VBA codes. Findings – The results confirmed some findings in the literature that investing to reduce environmental costs improves environmental performance and increases total profits. Research limitations/implications – The environmental quality cost function that was used was of a form that guarantees a global optimal solution. A limitation is that the function may take more complex forms where different analytical and solution methods would be needed. Originality/value – The model fills a gap in the literature where there is a lack of models to help managers implement environmentally acceptable coordinated two‐level supply chains.