An Integrated Supplier Selection Approach in Supply Chain System under Fuzzy Environment

Abstract

Due to the increasing awareness and government policies towards environmental sustainability, organizations are extending their efforts to enhance the environ-
mental practices in their supply chain (SC). At the same time, they are integrating their SC activities in such a way so as to reduce systems' cost while satisfying the needs of their consumers. Thus, organizations are collaborating with efficient suppliers in order to meet the quality level and customers' requirements in terms of economic and environmental aspects. In this study, an optimization mathematical model for selecting the suppliers based on interrelated attributes while taking care of ecological feature is developed by illustrating the case of an Indian manufacturing industry of microwave oven. This paper proposes an integrated supplier selection approach which consists of three stages. In the first stage, factor analysis method, also called as dimension reduction method, is utilized to reduce the variables into some interrelated attributes. An integrated methodology of mean and standard deviation along with a technique for order performance by similarity to ideal solution (TOPSIS) is employed in the second stage for assessing the performance of suppliers in numerical terms. The final stage comprises of a bi-objective mathematical model. The model is formulated to minimize the system's cost while simultaneously minimizing the carbon emission. The model helps in identifying the procurement amount of products efficiently and identifying the appropriate distribution center (DC) on the basis of customers' demand and its own capacity to deliver the goods to the retail stores (RSs). Fuzzy goal programming approach is utilized further to create a trade-off between two contradictory goals of the optimization model. The results suggest that integrating environmental with economical aspect can improve the performance of the SC network.