TY - JOUR A1 - Kellner, Florian A1 - Utz, Sebastian T1 - Sustainability in supplier selection and order allocation: combining integer variables with Markowitz portfolio theory JF - Journal of Cleaner Production N2 - This research presents a decision support methodology for the multi-criteria supplier selection and order allocation problem. The proposed approach supports purchasing managers in assembling mid-term supplier portfolios while making them aware of the trade-offs between the supplier sustainability, the purchasing costs, and the overall supply risk. First, we propose a multi-objective optimization model with three objectives: to maximize the supplier sustainability, to select the supplier portfolio with the lowest purchasing costs, and to minimize the supply risk. Our model extends existing mathematical approaches that follow the portfolio theory fathered by H. Markowitz by integrating the aspect ‘risk’ into the supplier selection problem. Secondly, since we allow for integer variables in our model—in contrast to the classical Markowitz portfolio theory—we use the ε-constraint method to visualize the efficient surface. The possibility of considering the non-dominated set of supplier portfolios is advantageous for purchasing managers as they gain a picture of the different optimal supplier portfolios and are able to analyze the trade-offs between the different purchasing goals before making a decision. Finally, we illustrate the applicability of the proposed methodology in a real-world supplier selection and order allocation case from the automotive industry. In the example case, we identify 1754 optimal supplier portfolios that may be assembled based on the eight available suppliers. Our analyses show that each optimal portfolio consists of two suppliers, with one specific supplier being included in each portfolio. Furthermore, four suppliers are not part of any optimal solution. KW - Supplier selection KW - Sustainability KW - Graphical decision support application KW - Multi-criteria decision making KW - Order allocation KW - Supply risk Y1 - 2019 U6 - https://doi.org/10.1016/j.jclepro.2018.12.315 VL - 214 SP - 462 EP - 474 ER - TY - JOUR A1 - Kellner, Florian A1 - Utz, Sebastian T1 - An inverse optimization approach for studying sustainability preferences in sourcing decisions JF - Journal of Cleaner Production N2 - Throughout many societies around the globe, there is growing awareness of the urgent need for the transition towards a sustainable economy. Research shows that buying firms have substantial leverage to initiate sustainable development by controlling the sustainable performance of their suppliers. In that context, this article presents a novel methodology based on inverse optimization to derive the implicit preferences of decision-makers in the trade-off between traditional sourcing objectives and sustainability in the supplier selection and order allocation process. The derived implicit preferences can then be used for further analyses to gain a better understanding of the characteristics of purchasing managers and sourcing situations that come with particularly high/low preferences placed on sustainability. Since the inverse optimization approach is computationally resource-intensive and consumes a significant amount of time, we present a scalable state-of-the-art cloud architecture that allows solving an arbitrary number of optimization programs in an acceptable amount of time. We demonstrate the feasibility of the proposed methodology in a real-world case. In doing so, we test how important sustainability aspects are in the supplier selection and order allocation decisions of one of the world's largest automotive parts manufacturers. KW - Supplier selection KW - Order allocation KW - Sourcing decisions KW - Sustainability KW - Inverse optimization Y1 - 2024 U6 - https://doi.org/10.1016/j.jclepro.2024.144305 VL - 483 ER -