Integrated fuzzy multi criteria decision making method and multi-objective programming approach for supplier selection and order allocation in a green supply chain

Abstract

Abstract An organization's environmental performance is affected by its suppliers' environmental performance, and selecting green suppliers is a strategic decision in order to be more competitive in today's global market. The supplier selection problem involves several quantitative and qualitative criteria. In the supplier selection process, if suppliers have limited capacity or other constraints, it is necessary to determine the best supplier and order quantity of each supplier. In this paper, we present an integrated approach, of fuzzy multi attribute utility theory and multi-objective programming, for rating and selecting the best green suppliers according to economic and environmental criteria and then allocating the optimum order quantities among them. At first, the fuzzy analytic hierarchy process and fuzzy technique for order preference by similarity to ideal solution is applied in order to analyze the importance of multiple criteria by incorporating experts' opinion and to determine the best green suppliers. Next, multi-objective linear programming is used to consider and to formulate various constraints such as quality control, capacity, and other objectives. The objective of the mathematical model is simultaneously to maximize the total value of purchasing and to minimize the total cost of purchasing. To handle the subjectivity of decision makers' preferences, fuzzy logic has been applied. The efficiency and application of the proposed approach has been illustrated with a case study in an automobile manufacturing company. The obtained results help firms establish a systematic approach for tackling green supplier selection and order allocation problems in a realistic situation. Finally managerial implications, conclusions, and directions for additional research are introduced.