Identifying Robust portfolios of suppliers: a sustainability selection and development perspective

Abstract

The initial selection and development of suppliers is a critical and increasingly complex component of organizational supply chains. In recent years sustainability issues have played an increasing role in making these decisions, though there has been limited activity in the literature in this regard. We develop an optimization model that simultaneously addresses supplier selection, supplier development, and sustainability considerations. Sustainability is integrated in the form of supplier sustainability ratings and sustainable supplier development through investment and training budgets. To handle the considerable complexity concerning such decisions, we demonstrate a recent algorithmic approach that can identify a portfolio (set) of multiple high-quality and yet collectively diverse solutions. This approach is carried out on a selection of randomly generated, representative test instances. Encouraging computational results and managerial implications are analyzed and discussed.