Selection of suppliers by multi-objective mathematical modeling and rough set theory considering environmental conditions

M.S.C master's thesis in the field of industrial engineering

 Industries-Industries trend

Academic year 1389-1392

Abstract:

With increasing government supervision and the increasing attention of public opinion to environmental issues, companies cannot ignore environmental issues in order to survive in the global market. For this reason, an evaluation system for green suppliers is an essential need of companies. In most of the studies related to the selection of suppliers, models for evaluation and selection have been presented, but in most of the above models, issues related to the environment have not been considered. In this research, an attempt is made to evaluate and select suppliers using a multi-objective mathematical model with four objectives: quality, price, service level, and environmental performance. First of all, the environmental criteria of the company's experts in the selection of green suppliers are determined by comprehensive questionnaires, then the performance coefficient of the suppliers in each specific sub-criterion is determined. In the following, the effect of each of the criteria in the function of environmental effects is determined by using the mathematical method of Raff set theory. The theory of rough sets is a new and suitable method for dealing with ambiguity, uncertainty and lack of information. Of course, in order to validate the weights obtained from the Raff set theory method, new entropy weights are obtained using the technique and the results are compared. The model presented in this research helps companies to choose the best green supplier for cooperation. Finally, the above model is explained by providing a case example.

Key words: green supplier selection, Raff set theory, entropy technique, multi-objective mathematical model

Chapter one:

General research

Chapter one: General research

Introduction and introduction of the topic: 

Today, environmental pollution is the main problem on earth, if it is not addressed, it can lead to the extinction of the human race. Therefore, taking appropriate action on a large technological scale and social, financial and political changes seems necessary. One of the processes that can be effective in any organization to consider this importance and apply it in all work processes is supply chain management (SCM) [1]. Supply chain management is the management and coordination of a complex network of activities involved in providing the final product to the customer (Ninluan et al., 2010)[2]. Beyond this definition, by adding the word green, Green Supply Chain Management (GSCM [3], which refers to green procurement, green production, green distribution and reverse logistics) is introduced. Green supply chain management was introduced by the Michigan State University Industrial Process Society in 1996, which is actually a new management model for environmental protection (Wang Wei et al., 2007)[4].

  The idea of ??green supply chain management is to eliminate or minimize Delivering waste (energy, hazardous chemical production, solid waste) along the supply chain. Environmental issues under the law and customer guidelines, especially in the United States, the European Union and Japan, have become an important concern for manufacturers. Green supply chain management as an important innovation helps the organization to achieve joint profit and market goals, by reducing environmental risks and increasing its environmental efficiency. On the other hand, the selection of suppliers is one of the most fundamental activities of the supply chain It has become a key and strategic consideration. The cost of providing raw materials and composite parts through the supplier constitutes a significant part of the finished goods cost. On average, 70% of the value of the final product of factories is the cost of purchasing raw materials and services received from outside (Qabadian et al., 1993). This ratio even reaches 80% in companies with advanced technology (Weber et al., 1991) [5]. Therefore, the choice of suppliers is extremely important for companies. As much as the selection of suitable suppliers is effective in reducing costs and increases the competitiveness of companies, the selection of inappropriate suppliers can also degrade the financial and operational position of companies. For this reason, an evaluation system for green suppliers is necessary to determine the competence of suppliers to join manufacturers.

Purchasing process considering environmental issues.

The purchasing process will be much more complicated considering environmental issues, because in green purchasing, the environmental role of suppliers should be taken into account in addition to the usual indicators such as price, quality, and service level of suppliers. For a long-term success in the global market, a company should not only pay attention to financial matters of suppliers, but also various indicators, including environmental concerns, should also be considered in relations with suppliers. Therefore, a green purchasing method should be in harmony with customers, laws and standards.

  Now, according to the issues raised, the question is, based on what criteria can be used to evaluate the environmental performance of suppliers? And what method would be more effective for this evaluation?

  The evaluation of suppliers is done based on different criteria. By sending a questionnaire to 273 factories, Dixon [6] identified 23 common criteria in evaluating suppliers. On-time delivery, quality and price are among the important criteria for evaluating suppliers in the supply chain. In terms of environmental indicators and criteria, the comprehensive framework suggested by Humphreys can be used, such as the amount of water pollution, air pollution, waste and waste management status, etc. Decision making and supplier selection is basically a multi-criteria issue. The nature of such decisions is usually complex and unstructured. Management science techniques can be helpful in making decisions for these issues. Multi-criteria decision-making models (MCDM [7]) are divided into two general categories; multi-objective decision-making models (MODM [8] and multi-criteria decision-making models (MADM) [9].

Dominance method [10], Lexicograph method [11], Permutation method [12], ELECTRE method and Analysis Hierarchy method (AHP) [13] among the multi-criteria decision-making methods in the evaluation and selection of supply suppliers.

One of the main methods used in this field is hierarchical analysis (AHP), which has the main problem of inconsistency in judgments and also the difference in selection criteria. In this research, we try to consider environmental issues in a comprehensive and complete way in the evaluation and selection of suppliers There are different methods for solving multi-objective mathematical planning problems, which differ depending on the time and type of information obtained from the decision maker (expert) [14], which can be referred to as the weighting method [15], the comprehensive criteria method [16] and the ideal planning method (GP [17]). A new method called Raff sets theory [18] is also used to obtain the impact of the criteria on the environmental effects function. It is certainty. The above method was presented by Pavlak in 1982. In this method, the uncertainty in experts' judgments is calculated by means of upper and lower approximations. The lower approximation is the set of all objects that definitely belong to the set, and the upper approximation includes the components that probably belong to the set. The difference between the upper approximation and the lower approximation defines the boundary region. In fact, the uncertainty in this theory is described using the boundary region.

Research objectives and assumptions:

1-2-1- Research objectives:

  One of the main goals of this research is to review the literature on green supplier selection and to show the claim that there is a weakness in the literature for evaluating and selecting suppliers, especially with regard to environmental indicators. Another goal is to determine an efficient and flexible model for evaluating and selecting suppliers based on environmental indicators. The efficiency of the proposed model is about the environmental criteria meant in the green supplier selection process, as well as the flexibility of the model in the number of sub-criteria. Applying the multi-objective mathematical planning model to evaluate suppliers and also using the theory of raw sets to weight the environmental indicators in order to achieve the above goals. 1-2-2 Research assumptions: This research is based on three hypotheses, which are:

The literature is weak in the evaluation and selection of suppliers, especially with regard to environmental methods.