Supplier Selection and Order Allocation under a Carbon Emission Trading Scheme: A Case Study from China
Abstract
:1. Introduction
- (1)
- How can manufacturing firms with carbon constraints choose suppliers and allocate orders among them while considering the costs of embedded carbon?
- (2)
- Have the current ETSs in China driven Chinese manufacturing firms to choose low-carbon suppliers?
- (3)
- How will a more stringent ETS impact supplier selection strategies?
2. Literature Review
2.1. Evaluation Methods for Low-Carbon Supplier Selection and Order Allocation
2.2. Evaluation Criteria for Supplier Selection
2.2.1. Economic Criteria
2.2.2. Environmental Criteria
2.2.3. Social Criteria
2.3. Contributions of This Paper
3. Methodology
3.1. Evaluation of the Suppliers’ Soft Competitiveness by Using the ANP
- Step 1:
- Selection of the criteria and construction of the model;
- Step 2:
- Conduction of a pairwise comparison and development of a priority vector with consistency;
- Step 3:
- Construction and limitation of the supermatrix;
- Step 4:
- Evaluation of the alternatives.
3.1.1. Step 1: Selection of the Criteria and Construction of the Model
3.1.2. Step 2: Conduction of a Pairwise Comparison and Development of a Priority Vector with Consistency
3.1.3. Step 3: Construction and Limitation of the Supermatrix
3.1.4. Step 4: Evaluating the Alternatives
3.2. Development of the IP Model to Optimize Order Allocation
4. Results of the Case Study
4.1. Evaluation Results of the Suppliers’ Soft Competitiveness
4.2. Optimal Results of Supplier Selection and Order Allocation under the ETS
5. Analysis and Discussion of the Cost Structure
6. Conclusions
Author Contributions
Funding
Conflicts of Interest
References
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Criteria (Abbreviation) | Definition | Influencing Factors |
---|---|---|
Lot rejection rate of the product (Q1) | The percentage of processed parts that are rejected for a certain number of pieces. | Q5, DS1, BC1, BC2, BC6 |
Quality management system and certificates (Q2) | A good and complete quality management system and whether it is certified by an authority. | Q4, BC3, BC5, BC6 |
Capability of handling abnormal quality (Q3) | A systematic way of handling (potential) negative feedback or any factors that cannot meet customers’ expectations. | Q1, Q4, DS3, BC1, BC5, BC6 |
Traceability system (Q4) | A complete set of measures that can be used to identify specific aspects that cause quality problems. | Q2, Q5, BC1, BC3 |
Inspection technology and capacity (Q5) | Advanced equipment and scientific inspection methods are applied to inspect product quality during production. | Q4, DS1, BC1, BC3, |
Containment action (Q6) | The capability of the firm to immediately respond to any quality issue. | Q1, Q2, Q3, Q4, Q5, DS1, DS2, BC4, SI1 |
Delivery schedule (DS1) | Whether the supplier can deliver the order quantity on time. | Q1, Q3, Q4, Q5, Q6, DS3, DS4, BC1, BC2, BC3, BC4, BC5, BC6 |
After-sales service (DS2) | The capability, attitude, and technical support level of the supplier for follow-up service after the order is complete. | Q1, Q2, Q3, Q4, Q5, Q6, DS1, DS3, BC1, BC3, BC4, BC5, BC6, SI1 |
Response to specific requests (DS3) | A complete service management system to deal with occasional or unconventional requirements of customers. | Q2, Q3, Q4, Q5, DS1, DS2, DS5, BC1, BC2, BC3, BC5, BC6 |
Response to the MPS (master production schedule) variance (DS4) | The flexibility of production and service, reflecting the ability of suppliers to deal with temporary increases or decreases in orders. | Q1, Q2, Q3, Q4, Q5, DS1, DS3, BC1, BC3, BC5, BC6 |
Capacity of new product initiation (DS5) | A complete service system and corresponding responsible people to address the order of a new product. | Q2, Q4, Q5, DS3, BC1, BC2, BC3, BC5, BC6 |
Technology level (BC1) | The current production technology level of a supplier. | Q5, BC2, BC6 |
Capacity of R&D (BC2) | Whether the supplier has sufficient capacity to maintain or even improve its technology level. | Q2, Q5, BC1, BC3, BC6 |
Long-term relationship (BC3) | Whether the firm is willing to contract with the supplier to cooperate for a long time. | Q1, Q2, Q3, Q4, DS1, DS2, DS3, DS4, DS5, BC1, BC2, BC4, BC5, BC6, SI1 |
Response to government policies and regulations (BC4) | The sensitivity of the supplier to relevant policies and regulations. | Q4, BC1, BC2, BC5, BC6 |
Clear and reasonable organizational structure (BC5) | There are neither overlapping responsibilities nor unclaimed responsibilities between sectors. | Q2, BC6 |
Learning and development opportunities for employees (BC6) | A complete employee training and education system, clear standards, and fair opportunities for promotion. | Q2, BC5 |
Public disclosure of environmental and social performance (SI1) | Regular disclosures of the firm’s efforts in terms of social welfare improvement and environmental protection. | BC1, BC4, BC5, SI2, SI3, SI4 |
Support for education and job training programs (SI2) | The capability of providing sufficient job opportunities. The firm establishes scholarships and provides visiting or training programs for members of society. | Q2, BC5 |
Employee health and safety (SI3) | The reputation in society in terms of providing a good working environment. The firm promises to protect the health and safety of its employees. | BC1, BC5, SI1, SI4 |
Compliance with labor laws (SI4) | Whether the supplier has violated labor laws, such as by employing child labor. | BC5, SI1, SI3 |
Q1 | Q2 | Q3 | Q4 | |
---|---|---|---|---|
Q1 | 1 | 1 | 3 | 2 |
Q2 | 1 | 1 | 2 | 2 |
Q3 | 1/3 | 1/2 | 1 | 1/2 |
Q4 | 1/2 | 1/2 | 2 | 1 |
Local priorities | 0.3564 | 0.3257 | 0.1243 | 0.1936 |
Type | Symbol | Definition |
---|---|---|
Sets | S | Set of the suppliers, indexed by s |
M | Set of the manufacturers, indexed by m | |
Parameters | ρs | Carbon emissions per unit of component provided by supplier s |
ρsm | Carbon emission factor for the transportation from supplier s to manufacturer m in tons per mile | |
ρm | Carbon emissions per unit of product in manufacturing plant m | |
psm | Price of the component provided by suppler s to manufacturing plant m | |
km | Unit production cost of the manufacturing plant m | |
csm | Unit transportation cost from supplier s to manufacturing plant m | |
rsm | Distance from supplier s to manufacturing plant m | |
λs | Soft competitiveness index of supplier s | |
pc | Carbon price in the carbon market | |
CO2cap | Free carbon quotas allocated to the firm | |
CO2cur | Actual carbon emissions | |
Um | Maximum production capacity of manufacturing plant m | |
dem | Order demand for all the manufacturing plants of the firm | |
Decision variables | qsm | Number of components provided by supplier s to manufacturing plant m |
qm | Number of final products made by manufacturing plant m |
Suppliers | Raw Score | Ideal | Normal | Ranking |
---|---|---|---|---|
Supplier Wuxi | 0.0624 | 0.9886 | 0.3755 | 2 |
Supplier Beijing | 0.0632 | 1 | 0.3798 | 1 |
Supplier Shenzhen | 0.0407 | 0.6645 | 0.2448 | 3 |
Supplier Wuxi | Supplier Beijing | Supplier Shenzhen | |
---|---|---|---|
Distance to manufacturer Chengdu (km) | 1548 | 1518 | 1343 |
Distance to manufacturer Changsha (km) | 823 | 1609 | 358 |
Embedded carbon intensity (kg CO2 per unit product) | 225 | 181 | 135 |
Price (Yuan per unit product) | 300 | 306 | 315 |
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Share and Cite
Wang, C.; Yang, Q.; Dai, S. Supplier Selection and Order Allocation under a Carbon Emission Trading Scheme: A Case Study from China. Int. J. Environ. Res. Public Health 2020, 17, 111. https://doi.org/10.3390/ijerph17010111
Wang C, Yang Q, Dai S. Supplier Selection and Order Allocation under a Carbon Emission Trading Scheme: A Case Study from China. International Journal of Environmental Research and Public Health. 2020; 17(1):111. https://doi.org/10.3390/ijerph17010111
Chicago/Turabian StyleWang, Chen, Qingyan Yang, and Shufen Dai. 2020. "Supplier Selection and Order Allocation under a Carbon Emission Trading Scheme: A Case Study from China" International Journal of Environmental Research and Public Health 17, no. 1: 111. https://doi.org/10.3390/ijerph17010111