Addressing Economic/Environmental Sustainability Tradeoffs in Procurement Episodes with Industrial SuppliersApril 15, 2021 - Paul Brooks, Jason Merrick
Citation: Saunders, L., Brooks, J. P., Merrick, J. R., Autry, C. (2020). Addressing Economic/Environmental Sustainability Tradeoffs in Procurement Episodes with Industrial Suppliers. Production and Operations Management
FT50 UTD. IF 7.776 AIS 2.662
Government agencies and multinational companies can significantly influence the adoption of sustainable practices by manufacturing companies by including sustainability as one part of a multi-dimensional request for proposals. This paper develops a framework for determining a bidding firm’s optimal trade-off between sustainability and economic factors when responding to a government agency’s request for proposals. We then flip the model’s perspective, to investigate how the government agency could design their requests for proposals to maximize the bidding firms’ proposed carbon reductions. The model shows that government agencies and multinational companies must place significant importance on sustainability and cannot give credit for small changes if they hope for suppliers to meaningfully improve their long-term sustainability.