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Sustainability 2017, 9(3), 377; doi:10.3390/su9030377

Environmentally Friendly Supplier Selection Using Prospect Theory

1
School of Economics and Management, Xidian University, No. 2 Taibai South Street, Xi’an 710071, China
2
School of Economics and Management, Xidian University, No. 2 Taibai South Street, Xi’an 710071, China
3
Faculty of Management and Economics, Dalian University of Technology, Dalian 116024, China
4
School of Economics and Management, Hebei University of Engineering, No. 199, Guangming South Street, Handan 056038, China
5
School of Computer, Xidian University, No. 2 Taibai South Street, Xi’an 710071, China
*
Author to whom correspondence should be addressed.
Academic Editors: Sang-Bing Tsai, Bin Liu, Joseph Z. Shyu, Yongjian Li, Yong Deng, Ming-Lang Tseng and Jih-Jeng Huang
Received: 11 December 2016 / Revised: 1 March 2017 / Accepted: 1 March 2017 / Published: 4 March 2017
(This article belongs to the Special Issue Sustainability and Application of Green Production)
View Full-Text   |   Download PDF [563 KB, uploaded 4 March 2017]   |  

Abstract

This paper proposes an optimal selection method to address the real-world problem of environmentally friendly supplier selection, based on prospect theory. This study adopted the manufacturer’s point of view, and considered the manufacturer’s psychological and behavioral factors in the process of choosing suppliers. The first step was to build supplier-selection indexes for manufacturers. Then, the study assessed the attribute of manufacturer expectations as a reference point. Next, index gains and losses were evaluated against the expectation reference point, yielding a payoff matrix and loss matrix. Finally, the study used prospect theory to calculate the comprehensive prospect value of each supplier; comprehensive prospect values were sorted in descending order to help manufacturers make the best choice. View Full-Text
Keywords: prospect theory; aspiration; gain matrix; loss matrix; comprehensive prospect value prospect theory; aspiration; gain matrix; loss matrix; comprehensive prospect value
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Song, W.; Chen, Z.; Wang, X.; Wang, Q.; Shi, C.; Zhao, W. Environmentally Friendly Supplier Selection Using Prospect Theory. Sustainability 2017, 9, 377.

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