Incorporating carbon penalties into supplier selection in the supply chain

Abstract

Supply chain management (SCM) practices have flourished since the 1990s. Enterprises realize that a large amount of direct and indirect cost can be managed from effective and efficient SCM practices. Supplier selection has great impact on integration of the supply chain relationship. Effective and accurate supplier selection decisions are significant components for procurement and distribution management in many firms to enhance their organizational performance. In this study a multiple sourcing procurement distribution optimization problem is considered. Three objective functions are minimization of costs, maximization of performance and minimization of carbon emission penalty cost respectively. In order to solve the problem, a fuzzy mathematical model and a fuzzy goal programming solution approach are proposed to satisfy the decision maker’s aspirations for fuzzy goals. A real life case study is given to illustrate how the model is utilized.