Green supplier selection and order allocation in a low-carbon paper industry: integrated multi-criteria heterogeneous decision-making and multi-objective linear programming approaches

• Published in: Annals of operations research 2016-03, Vol.238 (1-2), p.243-276
• Main Authors: Govindan, Kannan, Sivakumar, R.
• Format: Article
• Language: English
• Subjects: Allocations; Business and Management; Carbon; Carbon dioxide; Combinatorics; Cost control; Cost engineering; Decision making; Economics; Emissions; Emissions control; Green economy; Greenhouse effect; Greenhouse gases; Linear programming; Management; Manufacturing industry; Mathematical models; Mathematical programming; Methods; Operations management; Operations research; Operations Research/Decision Theory; Paper industry; Paper mills; Pulp & paper industry; Raw materials; Recycling; Studies; Suppliers; Supply chains; Theory of Computation; Vendor relations
• ISSN: 0254-5330; 1572-9338
• DOI: 10.1007/s10479-015-2004-4

The low-carbon supply chain is one of the predominant topics towards a green economy and it establishes the opportunity to reduce carbon emissions across the product value chain. This paper focuses on recycling and optimized sourcing in the paper industry as a case company. The main objective is to engage the case company with their supplier networks to diminish the greenhouse gases (GHG) emissions and cost in their production process. It proposes a model to support the selection of the best green supplier and an allocation of order among the potential suppliers. The proposed model contains a two-phase hybrid approach. The first phase presents the rating and selection of potential suppliers by considering economics (cost), operational factors (quality and delivery), and environmental criteria (recycle capability and GHG emission control) using Fuzzy Technique for Order of Preference by Similarity to Ideal Solution (Fuzzy TOPSIS) methodology. The second phase presents the order allocation process using multi-objective linear programming in order to minimize cost, material rejection, late delivery, recycle waste and CO 2 emissions in the production process. A case study from a paper manufacturing industry is presented to elucidate the effectiveness of the proposed model. The results demonstrate a 26.2 % reduction of carbon emission by using recycle products in the production process. The firm benefits by forming a systematic methodology for green supplier evaluation and order allocation. Finally, a conclusion and a suggested direction of future research are introduced.