Towards sustainable development: Green supply chain design and planning using monetization methods

Abstract Addressing environmental concerns in supply chain is a challenge, where one of the greatest difficulties is quantifying the environmental impacts. This quantification in abstract units is often done, but it does not always allow decision‐makers to understand how their supply chains' influence the environment. In this regard, environmental quantification in monetary units can be an asset but, on this, not enough information exists about their application in supply chain. This work intends to develop a decision support tool for the design and planning of closed‐loop supply chains accounting for the monetization of environmental impacts, exploring the most used monetization methods. As main contributions, this paper supports the understanding of the methodological basis of the main monetization methods. This is then embedded into an optimization‐based decision supporting tool that defines the design and planning of supply chain allowing to conclude on the most appropriate methods to used when considering supply chain environmental performance. From the results is also demonstrated how the different monetization methods can influence the supply chain design and planning. A set of main recommendations to decision‐makers and researchers is provided that support the definition of supply chain strategy towards greener systems allowing the evolution of the currently practiced knowledge.