Ding, HuipingLiu, QianZheng, Lucy2016-12-232016-12-232016-05-09Ding, H., Liu, Q. Zheng, L. (2016) 'Assessing the economic performance of an environmental sustainable supply chain in reducing environmental externalities', European Journal of Operational Research, 255 (2), pp. 463-480.0377-221710.1016/j.ejor.2016.05.003http://hdl.handle.net/2436/620323This is an accepted manuscript of an article published by Elsevier in European Journal of Operational Research on 09/05/2016, available online: https://doi.org/10.1016/j.ejor.2016.05.003 The accepted version of the publication may differ from the final published version.This study investigates the mechanism that motivates supply chain firms to reduce environmental externalities while balancing the economic feasibility of the supply chain system under environmentally constrained circumstances in a competitive market. Taking government policy incentives into account, a quantitative model of an integrated supply chain that incorporates sustainable constraints is formulated to optimize supply chain firms’ operational strategies of producing environmental friendly products (EFPs). This study contributes to the literature with a better understanding the interplay and interrelation of multiple sustainable constraints and their impact on supply chain firms’ collaborative decisions. Our findings suggest that the decisions of operating EFPs are subject to sustainable constraints and that the government policy incentives play a dominant role overseeing supply chain firms’ environmental behaviors toward sustainability.enSustainable supply chainEnvironmental externalitySustainable constraintEnvironmental friendly productsStakeholdersJournal articleEuropean Journal of Operational Research