An Integrated Multi-criteria Structural Equation Model for Green Supplier Selection

Abstract

The aims of the current study are to determine the criteria to be considered in a green supplier selection (GSS) process, develop an integrated decision-making approach using structural equation modelling (SEM) and fuzzy additive ratio assessment (ARAS) techniques to rank suitable suppliers, and investigate the effectiveness of this approach in collective decision-making. The study’s ultimate objective is to propose a method created from the perspective of fuzzy logic in which criterion weights are determined using SEM to resolve decision-making challenges such as GSS, in which a compromise solution is desired. In the first stage of the study, relevant literature as examined in detail. Eight main criteria and 27 sub-criteria were detected, taking into account classical, green, and social supplier selection (SS) criteria. A questionnaire was administered to 254 participants who were actively involved in SS processes for their companies, and the data were analyzed using SEM. In the second phase, six suppliers were evaluated considering the criteria found to have a positive impact on GSS, and fuzzy ARAS was applied. The results showed that the factors affecting GSS are quality (0.291), social responsibility (0.222), service (0.21), cost (0.149) and green product (0.128). The study presents an effective, objective, and fast method that can be used in decision-making problems such as GSS, that prevents potential loss of information and lack of transparency through an integrated approach, and that can be tested with a generalizable framework. The proposed hybrid method is an efficient and practical approach that can be tested on many decision-making problems, such as SS.