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Influence of non-price and environmental sustainability factors on truckload procurement process

Author

Listed:
  • R. Jothi Basu

    (Sethu Institute of Technology)

  • Nachiappan Subramanian

    (The University of Nottingham Ningbo)

  • Angappa Gunasekaran

    (University of Massachusetts Dartmouth)

  • P. L. K. Palaniappan

    (Thiagarajar College of Engineering)

Abstract

In practice, manufacturers select their logistics service providers mainly based on total procurement cost. In addition to this, they will also consider allied services such as cargo insurance, electronic documentation, even though practitioners emphasize importance of other factors such as on time delivery and carbon emissions. This study proposes sustainable decision model which includes various non-price and environmental sustainability factors and analyzes their influences in allocating typical routes to the carriers,while establishing a truck load contract. Multiple case studies are carried out in automotive and logistics companies to prioritize factors using Analytic Hierarchy Process (AHP). Factor prioritization is used to formulate carrier assignment problem as a multiple objective optimization model using the influencing factors identified and applies a heuristic methodology to derive the near-optimal solution. This study reveals that carbon footprint, route optimization and on time delivery will have huge impact on procurement decision.

Suggested Citation

  • R. Jothi Basu & Nachiappan Subramanian & Angappa Gunasekaran & P. L. K. Palaniappan, 2017. "Influence of non-price and environmental sustainability factors on truckload procurement process," Annals of Operations Research, Springer, vol. 250(2), pages 363-388, March.
    • Handle: RePEc:spr:annopr:v:250:y:2017:i:2:d:10.1007_s10479-016-2170-z
    DOI: 10.1007/s10479-016-2170-z
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