Supplier selection in the sustainable supply chain: The application of analytic hierarchy process and fuzzy data envelopment analysis

Subject Areas : Data Envelopment Analysis

حمیدرضا  رضایی ¹ (Department of Management, Rasht Branch, Islamic Azad University, Rasht, Iran)
محمد  طالقانی ² (Department of Industrial management, Islamic Azad University, Rasht, Iran)
محسن  شفیعیان ³ (Young Researchers and Elite Club, Rasht Branch, Islamic Azad University, Rasht, Iran)
تارا  نیک اندام ⁴ (Ph.D. Candidate in Industrial Management, Department of Industrial management, Islamic Azad University, Rasht, Iran)

Received: 2018-04-05 Accepted : 2018-05-01 Published : 2019-06-01

Keywords: Data envelopment analysis, fuzzy numbers, analytic hierarchy process, sustainable supplier selection, cross-efficiency evaluation,

Abstract :

The development and management of an effective and efficient supply chain involve the selection of the suppliers. Only economic criteria, including cost and delivery, once used to be considered in the process of supplier selection. But, they do not suffice for the evaluation of suppliers anymore due to the rapidly changing environment, and different perspectives are needed to be considered. The present paper aims to present a hybrid method based on fuzzy data envelopment analysis for sustainable supplier selection. At first, the criteria for sustainable supplier selection are derived from the relevant literature. Then, the hierarchy of the criteria and their preferential interrelations are specified by analytic hierarchy process. Eventually, the performance of the suppliers is evaluated using fuzzy data envelopment analysis. The presented DEA model has been inspired by the concept of ideal and anti-ideal decision-making units (DMUs) in the evaluation of cross-efficiency. According to this concept, a DMU is efficient if it is close to the ideal DMU’s performance and far from the anti-ideal DMU’s performance.

References:

Aktin, T., & Gergin, Z. (2016). Mathematical modelling of sustainable procurement strategies: three case studies. Journal of Cleaner Production, 113, 767-780.

Alcaraz, J., Ramon, N., Ruiz, J.L., & Sirvent, I. (2013). Ranking ranges in cross-efficiency evaluations. European Journal of Operational Research, 226(3), 516-521.

Ansari, Z. N., & Kant, R. (2017). A state-of-art literature review reflecting 15 years of focus on sustainable supply chain management. Journal of Cleaner Production, 142(4), 2524-2543.

Bai, C., & Sarkis, J. (2010). Integrating sustainability into supplier selection with grey system and rough set methodologies. International Journal of Production Economics, 124(1), 252-264.

Banaeian, N., Mobli, H., Fahimnia, B., Nielsen, I.E., & Omid, M. (2018). Green supplier selection using fuzzy group decision making methods: A case study from the agri-food industry. Computers & Operations Research, 89, 337-347.

Barbosa-Povoa, A.P., Silva, C., & Carvalho, A. (2017). Opportunities and Challenges in Sustainable Supply Chain: An Operations Research Perspective. European Journal of Operational Research, (in press). https://doi.org/10.1016/j.ejor.2017.10.036

Bastas, A., & Liyanage, K. (2018). Sustainable Supply Chain Quality Management: A Systematic Review. Journal of Cleaner Production, 181, 726-744.

Bendul, J.C.,  Rosca, E., & Pivovarova, D. (2017). Sustainable supply chain models for base of the pyramid. Journal of Cleaner Production, 162, S107-S120.

Bhattacharya, A., Geraghty, J., Young, P., (2010). Supplier selection paradigm: An integrated hierarchical QFD methodology under multiple-criteria environment. Applied Soft Computing, 10(4), 1013-1027.

Brunelli, M. (2015). Introduction to the Analytic Hierarchy Process. SpringerBriefs in Operations Research. P. 83. 978-3-319-12502-2 (electronic). 10.1007/978-3-319-12502-2.

Buyukozkan, G., & Berkol, C. (2011). Designing a sustainable supply chain using an integrated analytic network process and goal programming approach in quality function deployment. Expert Systems with Applications, 38(11), 13731-13748.

Buyukozkan, G., & Cifci, G. (2011). A novel fuzzy multi-criteria decision framework for sustainable supplier selection with incomplete information. Computers in Industry, 62(2), 164-174.

Chai, J.Y., Liu, J.N.K., & Ngai, E.W.T. (2013). Application of decision-making techniques in supplier selection: A systematic review of literature. Expert Systems with Applications, 40(10), 3872-3885.

Chang, B., Chang, C.-W.,  & Wu, C.-H. (2011). Fuzzy DEMATEL method for developing supplier selection criteria. Expert Systems with Applications, 38(3), 1850-1858.

Charnes, A., Cooper, W., & Rhodes, E. (1978). Measuring the efficiency of decision making units. European Journal of Operational Research, 2(6), 429-444.

Chen, P.-S., & Wu, M.-T. (2013). A modified failure mode and effects analysis method for supplier selection problems in the supply chain risk environment: A case study. Computers & Industrial Engineering, 66(4), 634-642.

Cheng, Y., Peng, J., Zhou, Z., Gu, X., & Liu, W. (2017). A Hybrid DEA-Adaboost Model in Supplier Selection for Fuzzy Variable and Multiple Objectives. IFAC-PapersOnLine, 50(1), 12255-12260.

Daneshvar, B. (2014).Supplier Selection Using Integrated Fuzzy TOPSIS and MCGP: A Case Study. Procedia - Social and Behavioral Sciences, 116, 3957-3970.

Dickson, G. (1966). An analysis of supplier selection systems and decisions. Journal of Purchasing, 2(1), 5-17.

Ding, H., Huang, H., & Tang, O. (2018). Sustainable supply chain collaboration with outsourcing pollutant-reduction service in power industry. Journal of Cleaner Production, 186, 215-228.

Doyle, J., & Green, R. (1994). Efficiency and cross efficiency in DEA: derivations, meanings and uses. Journal of the Operational Research Society, 45(5), 567-578.

Fallahpour, A., Olugu, E.U., Musa, S.N., Wong, K.Y., & Noori, S. (2017). A decision support model for sustainable supplier selection in sustainable supply chain management. Computers & Industrial Engineering, 105, 391-410.

Feil, A.A., Quevedo, D.M., & Schreiber, D. (2015). Selection and identification of the indicators for quickly measuring sustainability in micro and small furniture industries. Sustainable Production and Consumption, 3, 34-44.

Gold, S., & Awasthi, A. (2015). Sustainable global supplier selection extended towards sustainability risks from (1+n)th tier suppliers using fuzzy AHP based approach. IFAC-PapersOnLine, 48(3), 966-971.

Gonzalez, M.E., Quesada, G., & Monge, C.A.M. (2004). Determining the importance of the supplier selection process in manufacturing: a case study. International Journal of Physical Distribution & Logistics Management, 34(6), 492-504.

Goren, H.G. (2018). A decision framework for sustainable supplier selection and order allocation with lost sales. Journal of Cleaner Production, 183, 1156-1169.

Govindan, K., Khodaverdi, R., & Jafarian, A. (2013). A fuzzy multi criteria approach for measuring sustainability performance of a supplier based on triple bottom line approach. Journal of Cleaner Production, 47, 345-354.

Govindan, K., Rajendran, S., Sarkis, J., & Murugesan, P. (2015). Multi criteria decision making approaches for green supplier evaluation and selection: a literature review. Journal of Cleaner Production, 98, 66-83.

Hashemi, S.H., Karimi, A., & Tavana, M. (2015). An integrated green supplier selection approach with analytic network process and improved Grey relational analysis. International Journal of Production Economics, 159, 178-191.

Hatami-Marbini, A., Saati, S., & Tavana, M. (2010). An ideal-seeking fuzzy data envelopment analysis framework. Applied Soft Computing, 10(4), 1062-1070.

Ho, W., Xu, X. & Dey, P.K. (2010). Multi-criteria decision making approaches for supplier evaluation and selection: A literature review. European Journal of Operational Research, 202(1), 16-24.

Hong, J., Zhang, Y., & Ding, M., (2018). Sustainable supply chain management practices, supply chain dynamic capabilities, and enterprise performance. Journal of Cleaner Production, 172, 3508-3519.

Hsu, C.-W., Kuo, T.-C., Chen, S.-H., & Hu, A.H. (2013). Using DEMATEL to develop a carbon management model of supplier selection in green supply chain management. Journal of Cleaner Production, 56, 164-172.

Igarashi, M.,  Boer, L., & Fet, A.M. (2013). What is required for greener supplier selection? A literature review and conceptual model development. Journal of Purchasing and Supply Management, 19(4), 247-263.

Kahraman, C., Ruan, D., Dogan, I. (2003). Fuzzy group decision-making for facility location selection. Information Sciences, 157, 135-153.

Kannan, D., Govindan, K., & Rajendran, S. (2015). Fuzzy axiomatic design approach based green supplier selection: a case study from Singapore, Journal of Cleaner Production, 96, 194-208.

Karsak, E.E., & Dursun, M. (2014). An integrated supplier selection methodology incorporating QFD and DEA with imprecise data. Expert Systems with Applications, 41(16), 6995-7004.

Keshavarz, M., Amiri, M., Zavadskas, E.K., & Antucheviciene, J. (2017). Supplier evaluation and selection in fuzzy environments: a review of MADM approaches. Economic Research-Ekonomska Istrazivanja, 30(1), 1073-1118.

Kontis, A.P., & Vrysagotis, V. (2011). Supplier selection problem: a literature review of Multi-criteria approaches based on DEA. Advances in Management & Applied Economics, 1(2), 207-219.

Kuo, R.J., Wang,, Y.C., & Tien, F.C. (2010). Integration of artificial neural network and MADA methods for green supplier selection. Journal of Cleaner Production, 18, 1161-1170.

Lin, R., Chen, Z., & Xiong, W. (2016). An iterative method for determining weights in cross efficiency evaluation. Computers & Industrial Engineering, 101, 91-102.

Liu, S., & Papageorgiou, L.G. (2013). Multiobjective optimisation of production, distribution and capacity planning of global supply chains in the process industry. Omega, 41(2), 369-382.

Luthra, S., Govindan, K., Kannan, D., Mangla, S.K., & Gargd, C.P. (2017). An integrated framework for sustainable supplier selection and evaluation in supply chains. Journal of Cleaner Production, 140(3), 1686-1698.

Mafakheri, F., Breton, M., & Ghoniem, A. (2011).Supplier selection-order allocation: A two-stage multiple criteria dynamic programming approach. Int. J. Production Economics, 132(1), 52-57.

Mani, V., Agarwal, R., & Sharma, V. (2014). Supplier selection using social sustainability: AHP based approach in India. International Strategic Management Review, 2(2), 98-112.

Memon, M.S., Lee, Y.H., & Mari, S.I. (2015).Group multi-criteria supplier selection using combined grey systems theory and uncertainty theory. Expert Systems with Applications, 42(21), 7951-7959.

Mirhedayatian, S.M., Vahdat, S.E., Jelodar, M.J., & Saen, R.F. (2013). Welding process selection for repairing nodular cast iron engine block by integrated fuzzy data envelopment analysis and TOPSIS approaches. Materials & Design, 43, 272-282.

Moktadir, M.A., Ali, S.M., Rajesh, R., Paul, S.K. (2018). Modeling the interrelationships among barriers to sustainable supply chain management in leather industry. Journal of Cleaner Production, 181, 631-651.

Mota, B., Gomes, M.I., Carvalho, A., Barbosa-Povoa, A.P. (2017). Sustainable supply chains: An integrated modeling approach under uncertainty. Omega, 77, 32-57.

Orji, I.J., & Wei, S. (2015). An innovative integration of fuzzy-logic and systems dynamics in sustainable supplier selection: A case on manufacturing industry. Computers & Industrial Engineering, 88, 1-12.

Osiro, L., Lima-Junior, F.R., & Carpinetti, L.C.R. (2018). A group decision model based on quality function deployment and hesitant fuzzy for selecting supply chain sustainability metrics. Journal of Cleaner Production, 183, 964-978.

Paul, S.K. (2015). Supplier selection for managing supply risks in supply chain: a fuzzy approach. The International Journal of Advanced Manufacturing Technology, 79(1-4), 657-664.

Reuter, C., Goebel, P., & Foerstl, K. (2012). The impact of stakeholder orientation on sustainability and cost prevalence in supplier selection decisions. Journal of Purchasing & Supply Management, 18(4), 270-281.

Saaty, T. L. (1996). Decision Making with Dependence and Feedback: The Analytic Network Process. Pittsburgh: RWS Publications.

Saaty, T.L. (1980). The Analytic Hierarchy Process. New York: McGraw-Hill.

Sarkis, J., & Dhavale, D.G. (2015). Supplier selection for sustainable operations: A triple-bottom-line approach using a Bayesian framework. International Journal of Production Economics, 166, 177-191.

Sexton, T.R., Silkman, R.H., & Hogan, A.J. (1986). Data Envelopment Analysis: Critique and extensions, in Silkman, R.H. (Ed.), Mesuring efficiency: An assessment of Data Envelopment Analysis, Jossey-Bass, San Francisco, 32, 73-105.

Song, M., Zhu, Q., Peng, J., Gonzalez­, E.D.R.S. (2017). Improving the evaluation of cross efficiencies: A method based on Shannon entropy weight. Computers & Industrial Engineering, 112, 99-106.

Subramanian, N., & Gunasekaran, A. (2015). Cleaner supply-chain management practices for twenty-first-century organizational competitiveness: Practice-performance framework and research propositions. International Journal of Production Economics, 164, 216-233.

Sun, J., Wu, J., & Guo, D. (2013). Performance ranking of units considering ideal and anti-ideal DMU with common weights. Applied Mathematical Modelling, 37(9), 6301-6310.

Wang, Y.-M., & Chin, K.-S. (2010). Some alternative models for DEA cross-efficiency evaluation. International Journal of Production Economics, 128(1), 332-338.

Wang, Y.-M., Chin, K.-S., & Luo, Y. (2011). Cross-efficiency evaluation based on ideal and anti-ideal decision making units. Expert Systems with Applications, 38(8), 10312-10319.

Weber, C.A., Current, J.R., & Benton, W.C. (1991). Vendor selection criteria and methods. European Journal of Operational Research, 50(1), 2-18.

Wu, J., Chu, J., Sun, J., Zhu, Q., & Liang, L. (2016a). Extended secondary goal models for weights selection in DEA cross-efficiency evaluation. Computers & Industrial Engineering, 93, 143-151.

Wu, M., Li, C., Fan, J., Wang, X., & Wu, Z. (2018). Assessing the global productive efficiency of Chinese banks using the cross-efficiency interval and VIKOR. Emerging Markets Review, 34, 77-86.

Wu, T., & Blackhurst, J. (2009). Supplier evaluation and selection: an augmented DEA approach. International Journal of Production Research, 47(16), 4593-4608.

Wu, Y., Chen, K., Zeng, B., Xu, H., & Yang, Y. (2016b). Supplier selection in nuclear power industry with extended VIKOR method under linguistic information. Applied Soft Computing, 48, 444-457.

Yang, C.C., & Chen, B.S. (2006). Supplier selection using combined analytical hierarchy process and grey relational analysis. Journal of Manufacturing Technology Management, 17(7), 926-941.

Zhang, M., Tse, Y.K., Doherty, B., Li, S., & Akhtar, P. (2016). Sustainable supply chain management: Confirmation of a higher-order model. Resources, Conservation and Recycling, 128, 206-221.