A supplier-manufacturer model for procurement plan in export oriented furniture industry with sustainability considerations

Abstract

Due to limited supply of high quality of teak log as raw materials for export oriented furniture industry in Indonesia, procurement plan becomes a critical operation. The furniture industry (manufacturer) buys high quality teak log from Perum Perhutani (supplier), a state-owned forestry company that has responsibility not only to supply teak logs but also to keep the environmental and social role of the forest in Indonesia. The manufacturer should also consider sustainability due to the demands of the stakeholders. This study proposes a relationship model between supplier and manufacturer for procurement plan and formulated as Goal Programming to get the most favorable solution considering economical, environmental, and social aspect both of supplier and manufacturer. The results show that the model can be used to determine the decision variables considering sustainability aspects. © 2013 Springer Science+Business Media Dordrecht.