Strategic supplier selection under sustainability and risk criteria

Supplier selection is a multi-faceted strategic decision but there is no research that considers factors like sustainability and risk, simultaneously. Moreover, when selection criteria are subjective and require decision makers' judgment, and each candidate supplier dominates a separate selection criterion, the decision-making process becomes more complex and traditional DEA models cannot differentiate between potential candidates. In this paper, we propose a multi-method approach based on quantitative empirical investigations, and analytical modeling. We utilize interval type-2 fuzzy sets to quantify decision makers' inputs and propose an extended super-efficiency DEA model, which includes both desirable and undesirable inputs and outputs to evaluate suppliers. This approach simultaneously incorporates sustainability and suppliers' risk factors into the supplier selection problem. The model is developed for both risk-neutral and risk-averse decision-makers. The efficiency and applicability of the proposed framework is demonstrated through a real case. Results show that considering sustainability criteria or risk factors separately results in inappropriate decisions.