Performance measurement for green supplier selection based on data envelopment analysis.

Abstract

With increasing global awareness of sustainable development and environmental protection, the importance of green supplier selection has become widely recognized. Recently, more and more literature focus on the green supplier selection issue and measurement of supplier performance; the measurement indicators mainly defined two sets of criteria, including management criteria and green criteria. A novel methodology based on data envelopment analysis (DEA) has been developed, which is effective for solving multi-criteria decision problems in supplier selection and evaluating the performance of a set of homogeneous decision-making units (DMUs). To solve the green supplier selection problem, previous studies apply the DEA method by dividing management criteria as inputs and green criteria as outputs. This paper aims to propose a DEA-type green supplier selection methodology by considering the management criteria and green criteria. Unlike the previous method, we define a reasonable and effective division of measurement indicators, where management criteria consist of input variables, desirable and undesirable output variables, while green criteria consist of desirable and undesirable output variables. We also provide an improved model with multi-criteria and multi-objective programming by considering DEA efficiency decomposition, which evaluates management, green, and overall efficiency of candidate suppliers simultaneously. The multi-criteria decision model will help companies to select the best green supplier. To demonstrate the applicability and effectiveness of our proposed model, we present a numerical example at last.