A Grey-Based Carbon Management Model For Green Supplier Selection Seyed Hamid Hashemi, Amir Karimi & Naghme Aghakhani Industrial Management Department, Faculty of Management, University of Tehran, Tehran, Iran s.hamidhashemi@ut.ac.ir, amir_karimi@ut.ac.ir Payam Kalantar Nautical Science Chabahar Maritime University Chabahar, Iran Abstract— Green supply chain management has received much attention from scholars and practitioners over the past decade due to the increased emphasis on environmental issues from governments, customers, employees, competitors, and communities. Although a number of studies have addressed supplier selection problems from an environmental perspective, consideration of carbon management for supplier evaluation has rarely been discussed in the literature. Therefore, this study intends to develop a grey-based carbon management model for supplier selection in a green supply chain. Since decision-making in supplier selection generally deals with uncertain and incomplete information, we made use of an improved grey relational analysis in order to evaluate and select the most appropriate supplier. A numerical example is presented to show the efficacy of the proposed approach in supplier evaluations. The proposed approach in this study is novel and can be applied to other decision-making problems. Recommendations for future studies are presented in the final section. Keywords—Improved grey relational analysis (IGRA), supplier selection, green supply chain management (GSCM), carbon management, grey theory I. INTRODUCTION Contemporary supply chain managers tend to maintain long-term relationships with suppliers, and use fewer but more reliable suppliers. Consequently, selecting appropriate suppliers depends on a wide range of factors, involving both quantitative and qualitative criteria [1]. In order to remain competitive in the global market, businesses need to systematically utilize supplier selection and evaluation models. Supplier selection and evaluation is considered important mainly because of the fact that suppliers play a critical role in the success of a business [2]. Given the intensifying deterioration of the environment caused by manufacturing companies, green supply chain management (GSCM) is gaining growing attention from scholars and practitioners. Srivastava [3] describes green supply chain management as “the integration of environmental thinking into supply chain management, including product design, material sourcing and selection, manufacturing processes, delivery of the final product to the consumers, as well as end-of-life management of the product after its useful life”. Additionally, GSCM is defined by Green et al. [4] as “the way in which innovations in supply chain management and industrial purchasing may be considered in the context of the environment”. Green supply chain management involves evaluating suppliers and selecting only those that operate according to certain environmental standards [5]. According to Hsu et al. [2], a growing number of studies are addressing supplier selection problems based on environmental perspectives. However, consideration of carbon management in green supplier selection has rarely been discussed in the literature, although it is vital for organizations to reduce carbon risk by collaborating with suppliers [2]. Recent reports from the World Business Council for Sustainable Development (WBCSD) and the World Resources Institute [6] suggest that at least 80% of carbon emissions are released in the total supply chain. As a result, the importance of considering carbon management in green supplier selection is beginning to be recognized by managers of different industries. Carbon management has attracted the attention of supply chain researchers in recent years. For example, Sundarakani et al. [7] proposed a model of carbon emission calculation by controlling the carbon footprint across a supply chain, which can be used by firms to reduce their carbon footprints. Likewise, Wittneben and Kiyar [8] describe methods of reducing emissions and adapting to climate change which can be implemented by any business. In addition, Hsu et al. [2] applied Decision Making Trial and Evaluation Laboratory (DEMATEL) in order to identify and rank the influential criteria of carbon management in green supply chain for enhancing the overall performance of suppliers. Since decision-making regarding supplier selection generally deals with incomplete information, such decisions become more complex. Accordingly, this paper intends to develop a novel grey-based carbon management model of green supplier selection under uncertainty. We made use of an improved grey relational analysis (IGRA) in order to select the most appropriate supplier in terms of carbon management. Grey-based techniques are able to capture, process, and integrate uncertainty in the decision-making process. They are also capable of reaching sufficient outcomes using a rather small amount of data or with great variability in factors. For these reasons, grey relational analysis (GRA) is suggested by 978-1-4673-5248-2/13/$31.00 ©2013 IEEE 402