Environmentally sustainable stochastic procurement model

Abstract

Purpose Procurement planning has always been a huge and challenging activity for business firms, especially in manufacturing. With government legislations about global concern over carbon emissions, the manufacturing firms are enforced to regulate and reduce the emissions caused throughout the supply chain. It is observed that procurement and logistics activities in manufacturing firms contribute heavily toward carbon emissions. Moreover, highly dynamic and uncertain business environment with uncertainty in parameters such as demand, supplier and carrier capacity adds to the complexity in procurement planning. The paper aims to discuss these issues. Design/methodology/approach This paper is a novel attempt to model environmentally sustainable stochastic procurement (ESSP) problem as a mixed-integer non-linear program. The ESSP optimizes the procurement plan of the firm including lot-sizing, supplier and carrier selection by addressing uncertainty and environmental sustainability. The model applies chance-constrained-based approach to address the uncertain parameters. Findings The proposed ESSP model is solved optimally for 30 data sets to validate the proposed ESSP and is further demonstrated using three illustrations solved optimally in LINGO 10. Originality/value The ESSP model simultaneously minimizes total procurement cost and carbon emissions over the entire planning horizon considering uncertain demand, supplier and carrier capacity.

Green product attributes and green purchase behavior

“…In the most recent years, multiple analytical models considering environmental issues have been developed with a view to improve managers’ decisions in terms of both supply chain management and carbon emission costs, including a nonlinear program providing an optimal supplier selection and lot-sizing policy along with carbon emissions under Big Data environment (Lamba et al , 2018), an integrated model considering stochastic demand, supplier capacity and carrier capacity in a carbon trading environment (Kaur and Singh, 2018), an environmentally sustainable procurement and logistics model for a supply chain (Kaur and Singh, 2017a, b), a dynamic nonlinear mixed integer model to design sustainable procurement logistics for disaster resilient supply chain management (Kaur and Singh, 2016) or a flexible dynamic sustainable procurement model (Kaur and Singh, 2017c). Overall, from a quantitative standpoint, such analytical models have increased the understanding of how to integrate environmental parameters into managers’ decision-making processes.…”

Sustainable supply chain management practices and performance

“…green) with lean management (LM) facilitates SSCM. Kaur and Singh (2018) suggest that effective and efficient procurement improves competitiveness by reducing the costs of procurement but also minimises the environmental impact of the manufacturing firm. Along with the competitive price of procurement, social and environmental issues are also prioritised in the decision-making processes (Svensson and Wagner, 2015).…”