European Journal of Operational Research 141 (2002) 7087

www.elsevier.com/locate/dsw

O.R. Applications

Applying environmental criteria to supplier assessment: A

study in the application of the Analytical Hierarchy Process
Robert Handeld a, Steven V. Walton
b

b,*

, Robert Sroufe c, Steven A. Melnyk

a
College of Management, North Carolina State University, NC, USA
Goizueta Business School, Emory University, 1300 Clifton Road, Atlanta, GA 30322-2710, USA
c
Wallace E. Carroll School of Management, Boston College, Chestnut Hill, MA, USA
d
Eli Broad College of Business, Michigan State University, MI, USA

Received 9 February 2001; accepted 6 July 2001

Abstract
Increasingly, purchasing managers are being asked not only to transform purchasing into a more strategic function
but also to integrate environmental issues in their decisions. Introducing the environmental dimension into purchasing
decisions embeds a new set of trade-os in the decision, complicating the decision-making process with both qualitative
and quantitative factors. Yet, few companies use any structured analysis to evaluate suppliers along environmental
dimensions. In this study, we illustrate the use of the Analytical Hierarchy Process (AHP) as a decision support model
to help managers understand the trade-os between environmental dimensions. We then demonstrate how AHP can be
used to evaluate the relative importance of various environmental traits and to assess the relative performance of several
suppliers along these traits. Three case studies were carried out to demonstrate the benets and weaknesses of using
AHP in this manner. Finally, we examine how AHP can be incorporated into a comprehensive information system
supporting Environmentally Conscious Purchasing (ECP).
2002 Elsevier Science B.V. All rights reserved.
Keywords: Environment (M); Analytic hierarchy processes (Z); Purchasing (T)

1. Introduction
Supply base sourcing and practices have
evolved signicantly in the last 20 years. Prior to
the 1980s, the purchasing function was typically

Corresponding author. Tel./fax: +1-404-727-3526.

E-mail address: steve_walton@bus.emory.edu (S.V. Walton).

viewed as being primarily clerical. It was essentially a tactical activity, and had little or no impact
on how the rm competed in the marketplace. The
purchasing manager aected the cost of materials
but little else. That view has changed signicantly.
Research has shown that suppliers are becoming
increasingly critical for the competitive success
of the rm (e.g., Handeld and Pannesi, 1995;
Monczka et al., 1993; Richardson, 1993). As such,
purchasing managers are now major contributors
to the ability of the rm to oer better products,

0377-2217/02/$ - see front matter
2002 Elsevier Science B.V. All rights reserved.
PII: S 0 3 7 7 - 2 2 1 7 ( 0 1 ) 0 0 2 6 1 - 2

R. Handeld et al. / European Journal of Operational Research 141 (2002) 7087

faster, at lower costs and with greater exibility.

This strategic view of the purchasing function
underlies the concept of strategic sourcing (Monczka et al., 1997).
However, this is not the only development affecting the purchasing function and its management and implementation. Increasingly, managers
and policy makers are coming to realize that purchasing can signicantly aect corporate performance along environmental dimensions. The
products that rms acquire through the purchasing function can aect the level of waste and pollution generated. This pollution impact can be
direct, in that the products acquired increase waste
during the storage, transportation, processing, use
or disposal of these purchased items. Alternatively,
this pollution can be indirect. That is, we can envision the goods and services being acquired by the
rm as consisting not only of the direct monetary
costs associated with them but also the waste
streams generated in producing them. The recognition of this environmental dimension has greatly
increased the complexity of the purchasing process. Buyers must purchase goods and services
from those suppliers that are able to produce these
products at the lowest costs, highest quality and
within the shortest lead time, but that are also
environmentally responsible in managing their
associated processes.
This movement towards greater environmental
responsibility is a result of several recent developments. First, the introduction of the ISO 14000
certication standard (based on the very successful ISO 9000 quality standard) focuses attention
on the performance of the rms Environmental
Management System (EMS) and the environmental impact of their processes. Purchasing is one key
process assessed in ISO 14000 because it is responsible for not only procurement of materials
but also their disposal at the end of their useful
life. Second, the emphasis on waste reduction from
external or governmental agencies like the Environmental Protection Agency (EPA) is escalating.
Environmental requirements are often more strict
within Europe. In addition, there is the recognition
that pollution is nothing more than a form of
waste (Porter and Van der Linde, 1995,b). As such,
pollution consumes resources and increases costs

71

without generating any osetting value. By eliminating pollution (especially in the purchased goods
and services), costs can be reduced and any associated legal problems avoided (or greatly reduced).
Companies such as Inter Continental Hotels have
been able to introduce green requirements successfully into their purchasing process (Makower,
1994). In this and other rms, initial evidence has
shown that incorporating environmental considerations has not harmed the ability of purchasing
to reduce costs, increase quality or reduce leadtime. Finally, there is the concern encountered by
Canadian and US rms involved in trade arrangements facilitated by NAFTA (North American Free Trade Agreement) that some suppliers
are using this pact to export their pollution
south of the border. These and other factors have
given environmental concerns both greater visibility and urgency.
Because the focus on environmental issues is
relatively new, little prior theory exists which could
direct environmentally friendly practices in manufacturing and materials management. Only recently have researchers begun to consider the
concept of ecological sustainability as a framework for studying management practices (Sarkis
and Rasheed, 1995; Klassen, 1993; Klassen and
McLaughlin, 1996; Wood, 1991). While these
paradigms provide broad frameworks for classifying organizational relationships with the natural
environment, they fail to address what conditions must be met, what factors need to be overcome, and what characteristics actually determine
an ecologically sustainable organization. Slowly,
however, the need to be environmentally friendly is
beginning to inuence decision-making in product
design (Allenby, 1993; Gupta, 1995), process design (Porter and Van der Linde, 1995,b; Klassen
and McLaughlin, 1996), manufacturing practices
(Winsemius and Guntram, 1992), and purchasing
(Handeld et al., 1997).
These factors have also exposed the inherent
complexities encountered when trying to merge
environmental concerns with purchasing practices
and systems. Environmental performance can be
evaluated at two dierent levels. It can be assessed
at the corporate level (and used as an indicator of
the predisposition of the rm to be environmentally

72

R. Handeld et al. / European Journal of Operational Research 141 (2002) 7087

responsible). It can also be assessed at the

product and/or service level. In addition, there is
the problem of dening what constitutes environmental responsibility. For example, should the
purchasing manager focus on the amount of recycled material used within the purchased items or
should the manager examine the extent to which
the supplying rms systems are in compliance with
existing governmental pollution regulations? Inherent in the task of dening environmental responsibility is the assessment of the numerous
trade-os typically encountered. Resolving these
trade-os is an important issue because the manner
in which they are resolved aects not only the operational denition used for environmental responsibility, but also the screening and assessing of
suppliers and their performance (either at the corporate or product level).
This study focuses on the challenge of assessing
and resolving trade-os as they pertain to the environmental responsibility of suppliers. Specically, this study examines the manner by which
managers can resolve these trade-os and more
eectively and eciently screen and assess supplier
performance. To assist managers, this study recognizes that sophisticated management science
tools and procedures have been developed by researchers that can potentially improve the quality
and timeliness of these decisions and actions. As
noted by other researchers writing about new
product development (Calantone et al., 1998), it is
surprising that while many of these tools have been
existence for a decade or more, they have seen
limited widespread use.
Specically, this study proposes and assesses the
use of the Analytic Hierarchy Process (AHP) as a
tool for helping managers structure the problem of
integrating environmental dimensions into supplier evaluation and selection decisions, resolve
trade-os and better screen and assess supplier
environmental performance. AHP is a simple yet
powerful tool that was rst developed within the
management science eld over 20 years ago (Saaty,
1980). It was developed to help managers make
more eective decisions by structuring and evaluating the relative attractiveness of competing options or alternatives. The AHP has been used
successfully for structuring decision-making in many

areas of business management and planning.

However, AHP has not been used frequently in
the area of purchasing practices, in general, and in
the area of green or environmentally conscious
purchasing, specically.
To summarize, the objectives of this study are:
To introduce the concept of Environmentally
Conscious Purchasing (ECP) and to examine
several of the major issues involved in the application and management of this approach to
purchasing.
To describe the process used to develop an
AHP model that assesses the dierent dimensions of supplier environmental performance,
and the subsequent pilot test of the model.
To describe how AHP could be applied in the
future and identify other areas pertaining to
ECP that could benet from the application of
this analytical procedure.
The paper is organized into ve major sections.
In Section 2, we explore the concept of environmentally conscious purchasing, and describe how
supplier environmental performance is integrated
into the supplier evaluation process. Section 3 assesses the suitability of AHP to supplier performance evaluation. In Section 4, we describe the
methodology used to develop the AHP model,
while Section 5 presents the results of three pilot
studies in which we applied the model. Section 6
describes how AHP could be used in the future
and identies other areas pertaining to ECP that
could potentially benet from the application of
this procedure.

2. Environmentally Conscious Purchasing introducing the concept

The process of formally introducing and integrating environmental issues and concerns into
the purchasing process is referred to as ECP.
This process, also known as green purchasing
(Handeld and Melnyk, 1996), is an integral
component of the Environmentally Conscious
Enterprise (ECE). This system is connected to
other areas of interest, such as environmentally

R. Handeld et al. / European Journal of Operational Research 141 (2002) 7087

responsible manufacturing (also referred to as

green manufacturing) (Melnyk and Smith,
1996) and industrial ecology. The following denition of the ECE is used to ground the discussion
of ECP:
ECE is a corporate system that integrates environmental issues into every aspect of corporate life. Included in this system are activities
such as accounting for the environment, environmentally responsible product design, production planning and control. By focusing
on these and other activities, ECE tries to:
(1) Identify the costs and benets associated
with environmental related performance; (2)
identify opportunities to manage and/or reduce waste; and (3) reduce and, ultimately,
eliminate waste within the system while also
maximizing resource eciency.
The recent emergence of purchasing as an important participant in the corporate sustainable
enterprise debate is the result of the convergence of
several developments that have highlighted purchasings role in eective environmental management. First, governmental pressure has increased
dramatically. This is demonstrated by the recent
explosive growth in the number of pages of regulations concerning environmental issues (Melnyk
and Smith, 1996). Second, the number of states
willing to open new landlls is shrinking, while
available landlls are rapidly lling up. Third,
critical shortages of several raw materials, especially minerals, are forcing rms to ramp up their
recycling eorts of these critical commodities.
Fourth, as more manufacturers strive to become
leaner and more cost eective, greater pressure is
being put on materials departments to seek cost
reductions in procurement and disposition.
Peterson (1996) describes building a purchasing
for environment program along standard business
dimensions: setting program goals, conducting feasibility analysis and justifying projects
and obtaining funding. Peterson seems to advocate building a new purchasing program from the
ground up. His argument fails to recognize that

73

virtually all organizations already have a formal

purchasing process in place. Thus, the most practical way to integrate environmental criteria is to
modify the existing purchasing process. The purchasing process typically consists of the following stages: dene the strategic importance of the
commodity, conduct research and develop commodity strategy, develop strategic objectives, implement strategy, and monitor progress (Monczka
et al., 1997).
Incorporating environmental considerations
signicantly alters the purchasing process. The
purchasing process may become more complicated
because purchasing must consider the suppliers
environmental responsibility, as well as the suppliers cost, lead-time, quality and exibility. At
present, research is not conclusive concerning the
extent to which environmental responsibility enables or retards the ability of the rm (and the
purchasing function) to improve its performance
on the other four dimensions. A set of guidelines
for decision-making within the context of the purchasing process that recognizes the growing importance of green purchasing to meet the strategic
needs of the organization is needed.
To address this need, we propose an alternative
to the framework of Monczka et al. (1997) to dene the specic decision-making processes and
information requirements associated with deployment of ECP (see Fig. 1). The top of the gure
illustrates how ECP begins with ensuring alignment of environmental objectives with other corporate objectives such as cost, quality, and
delivery. For instance, interviews with Sonys
purchasing personnel showed that Sonys procurement policy promotes QCDS + E (Quality, Cost,
Delivery, Service, and the Environment) in its relationships with business partners. A new image of
green purchasing emerges from this way of
thinking one driven by cost and strategy, economically justied, and integrated with corporate
and product/process decisions.
From the overall alignment with corporate
goals (Fig. 1), purchasing must collect information
from new and existing suppliers in the commodity
market of interest. Such information includes data

74

R. Handeld et al. / European Journal of Operational Research 141 (2002) 7087

Fig. 1. ECP strategy development process. Adapted from Monczka et al. (1997).

on current and potential new suppliers performance in terms of cost, quality, technology, delivery, and environmental record. Additional
information is provided in the form of engineerings product or technical specications/statement
of work for the required commodity. Finally,
information on new government emissions standards or new environmentally friendly technologies may be collected in the research phase. For
example, in the US an important criterion in this
process is the evaluation of suppliers capabilities
regarding distribution, safety, incidents, health
records, and adherence to federal EPA and Resource Conservation and Recovery Act regulations, and/or voluntary environmental programs.
For example, Dow Chemical only uses suppliers

who are part of the voluntary Responsible

Care initiative. Responsible Care is a dedication
of responsibility to the community regarding
chemicals, chemical transportation and manufacturing, as well as safe disposal and prompt reporting.
In the next stage, this information is used to
identify, quantify, assess, and select the best suppliers in terms of both operational performance
(cost, quality, delivery, technology, etc.) and environmental performance (reducing waste and
maximizing resource eciency.) It is at this stage
that a decision support tool is needed to balance
the technical, performance, and environmental
requirements for the commodity. The output of
this decision is an assessment of available sources

R. Handeld et al. / European Journal of Operational Research 141 (2002) 7087

of supply and a decision regarding how many and

which suppliers to develop a purchase contract
with. After the terms of the contract are negotiated, the performance of the supplier(s) is monitored, which serves as on-going input to revisions
of the commodity strategy decision.
As Fig. 1 suggests, the application of AHP
within this decision-making framework occurs
in the supplier evaluation stage, and is a critical
input to the strategy development process. Supplier evaluation often involves using a weighted
scoring system (Monczka et al., 1997). For instance, using 100 points as a perfect score to
measure a suppliers performance, the points
might be distributed as follows: 30 quality performance, 20 price, 20 delivery, 20 technology, and 10 environmental performance.
Purchasing managers often rely on historical supplier performance data to derive a score for the
sourcing decision at hand. Unfortunately, past
historical data on the suppliers performance may
not reect current events. This is particularly true
in the case of environmental performance. The
EPA may have targeted the suppliers process for
an audit, or they may have had recent occurrences
of toxic waste spillage, hazardous air emissions, or
other forms of pollution. On the other hand, the
supplier may have recently implemented a recycling or source reduction project that has improved environmental performance.
Weighted point systems have been shown to be
relatively eective when measuring easily quantied elements such as cost, quality, delivery, or
technical performance (Leenders and Feeron,
1993; Monczka et al., 1997). However, weighted
point supplier evaluation systems may be of limited usefulness in assessing a suppliers on-going
environmental performance, especially if the life
cycle of the product extends well into the future.
There are uncertainties regarding how to include
recent developments in the suppliers environmental performance, and how important such
events may be in terms of overall environmental
performance. For example, how do dierent environmental processes (recycling, ISO 14000 certication, source reduction, etc.) inuence the
suppliers environmental score? To overcome the
limitations of traditional supplier evaluation sys-

75

tems, we propose that managers apply the AHP

model to help them in making better supplier
evaluation and sourcing decisions while including
environmental performance as a criteria. In the
following section, we briey describe why AHP is
an appropriate tool for this objective and in the
following section, describe the methodology used
to develop the AHP model.

3. Analytical Hierarchy Process problem suitability for AHP

The AHP was originally devised by Saaty
(1980) to provide a framework for solving dierent
types of multi-criterion decision problems based
on the relative priorities assigned to each criterions role in achieving the stated objective. AHP is
a benet measurement (scoring) model that relies
on subjective managerial inputs on multiple criteria. These inputs are converted into scores that are
used to evaluate each of the possible alternatives.
The AHP is a powerful management science tool
that has proven useful in structuring complex
multiperson, multicriterion decisions in business
and economics. The advantages of AHP to the
user include its reliance on easily obtained managerial judgment data, its ability to reconcile differences (inconsistencies) in managerial judgments
and perceptions, and the existence of easy-to-use
commercial software (i.e. Expert Choice) that
implements the AHP (Calantone et al., 1998). For
a description of implementing and using AHP, see
Appendix A, Saaty (1980) or Saaty (1990).
Like any good decision tool, AHP is not designed to substitute for clear thinking by the decision-maker. It does, however, better organize
their thoughts and make them more presentable to
others. The real strength of AHP, though, is that it
treats the decision as a system, which is dicult for
many decision-makers to do. Bounded rationality
and limited cognitive processes make it nearly
impossible for the decision-maker to adequately
consider all of the factors involved in a complex
screening decision. Without decision support
methodologies like AHP, managers might base
their decisions on only a subset of important criteria while not understanding their relative weights

76

R. Handeld et al. / European Journal of Operational Research 141 (2002) 7087

and interactions. The AHP makes complex decision processes more rational by synthesizing all
available information about the decision in a system-wide and systematic manner. Further, the
actual process of conducting this analysis helps the
manager prioritize the criteria in a manner that
otherwise might not be possible.
Broadly speaking, AHP is an appropriate tool
whenever a goal for a decision can be clearly stated, a set of relevant criteria can be determined and
a set of alternatives can be described using these
criteria. As the number of relevant criteria grows,
sub-criteria are identied and the relative importance of each criterion is allowed to vary, AHP
becomes more valuable. Because of the natural
structuring embedded in AHP, it is also valuable
when the problem domain is relatively new. All of
these describe the context of integrating environmental criteria into supplier assessments.
While supplier evaluation and selection decisions are routine, very few companies have
developed a methodology for incorporating environmental issues into this decision. Many large
companies have set an explicit goal of minimizing
the negative impact of their supply chain, including
the impact caused by their suppliers (see for example, Environment: Value to Business, 1998).
However, the question of which supplier Environmental Performance Indicators (EPIs) should
be measured remains unanswered (see Ditz and
Ranganathan (1997) for a discussion of EPIs). In
this type of situation, the problem structuring associated with developing the AHP decision tree
provides signicant insight into which criteria most
inuence a suppliers environmental performance.
While there is emerging agreement on appropriate environmental metrics, there is still little
agreement on the relationship between the metrics
and their underlying performance traits. For example, a company might have to evaluate the
trade-o associated with a supplier that uses considerable Volatile Organic Compounds (VOCs) in
their process but has achieved ISO 14000 certication. Further, many of the EPIs are multidimensional, which only complicates an already
dicult question. In this instance, AHP allows for
sub-criteria beneath each main criterion while
maintaining a systems perspective.

Finally, many purchasing managers would nd

it dicult to describe supplier environmental performance adequately using quantitative data. This
is so partly because the denition of an appropriate EPI is unclear, and partly because few
companies collect and maintain detailed data
concerning supplier environmental performance.
One OEM in the electronics industry stated atly
that they do not collect that kind of information. This suggests the most important contribution for using AHP in evaluating suppliers along
environmental dimensions: currently no methodology is being used to integrate environmental
performance into supplier selection decisions. The
next section presents the details of how we applied
AHP to improve the use of environmental criteria
in supplier assessments.

4. Methods developing and testing the AHP model

The challenge in this study was to construct an
AHP model that included relevant environmental
criteria and could be readily applied to a variety of
industry applications, yet which was parsimonious
and not overly unwieldy to use by managers. Initially, we conducted a literature review to identify
a catalog of EPIs (for details, see Curkovic, 1998).
These EPIs are presented in Table 1. We also
identied a number of companies who are beginning to consider integrating environmental decisions into the supplier selection process, including
Daimler-Chrysler, Quad Graphics, NCR, Baxter,
AT&T, General Motors, and others. A number of
managers at these companies were interviewed by
telephone, and in some cases, actual supplier
evaluation manuals were obtained from the companies. All of these companies maintained active
databanks on a number of EPIs for all of its major
suppliers. However, none of them had eectively
developed a systematic method of integrating these
measures into the supplier evaluation and selection
decision. One of the biggest problems encountered
by purchasers at these companies was which metrics to use to evaluate greenness. Managers interviewed were unsure regarding how to weight the
relative importance of dierent EPIs, and how to
integrate these measures systematically into a sin-

R. Handeld et al. / European Journal of Operational Research 141 (2002) 7087

Table 1
List of environmental performance indicators
Biodegradable/compostable (%)
Building air quality alliance
Chemical treatment
Climatewise eco-labeling
Commitment to periodical environmental auditing
Contains no ozone depleting substances
Deep well injection
Design for the Environment (DfE)
Emissions and waste (per unit of product)
Energy eciency label
Environmentally-responsible packaging
Fresh water
Funds/materials contributed to environmental organizations
Global application of environmental standards
Green lights/Energy star
Greenhouse/Acid rain gases
Hazardous air emissions (CFCs, EtO, MEK, Toluene, etc.)
Hazardous waste
Hydrocarbons
Incineration
Involvement in Superfund site
ISO 14000
Land treatment/solar evaporation
Landll tons of waste per year
Longer shelf life than industry standard
Minerals/metal ores
Number of hours of training on environment per employee
Oil and gas resources
On EPA 17 hazardous chemicals list
Ozone depleters
Participation in voluntary EPA programs?
Pre/post consumer recyclable content (%)
Product labeling
Programs to foster employee awareness
Public disclosure of environmental record
Received any EPA/RCRA non-compliance nes?
Recyclable item (% of total)
Remanufacturing/rebuild/reusable
Resource recovery
Resources and energy (per unit of product)
Second tier supplier environmental evaluation
Secondary market for waste generated
Solid waste
Take-back or reverse logistics program
Third party certication (eco labeling)
Total energy used
Toxic water pollution (gallons)
Transportation waste emissions
Use of less hazardous alternative (% of weight/volume)
VOC content (%)
Water used (gallons)
Water eciency label
Wave/wastewise
Wood/wood ber consumed

77

gle quantity that could be used in a weighted point

analysis.
4.1. The Delphi group
In order to develop a rational framework of the
many dierent types of environmental criteria
shown in Table 1, we assembled a group of supply
chain managers from several Fortune 500 companies to conduct a Delphi group study. We chose
this method of group consensus over individual
elicitation in order to rst assess the overall
rankings of the criteria individually, then integrate the perspectives to create a single collective
framework in which to make sense of the results.
(See Malhotra et al. (1994) for a detailed discussion of applying the Delphi method to operations
issues.) The managers had a variety of titles, but
were responsible for materials management activities within their organizations. These managers
were chosen because they were known as experts in
the eld of environmental management, and had
primary responsibility for waste reduction and
materials management within their organizations.
The companies represented in the Delphi group
included Mascotech, Cone Drive, IBM, Herman
Miller, DLSC, and Ford. Initially, all of the
managers in the group agreed that more information was needed to make the supplier selection
decision relevant from an environmental perspective. Some participants emphasized that if eective
measures are not available, the environmental
category is only paid lip service in this decision.
However, the group also expressed confusion regarding how to dene a green supplier. Measures must be relevant to the overall objective of
a supply base that minimizes waste and impact
on the environment. However, it was also emphasized that measures should be relatively easy to
assess, as commodity strategy development teams
often do not have access to all the requisite environmental information.
The managers were then presented with the list
of environmental measures shown in Table 1, and
were asked to assess each measure on whether it
was relevant, easily assessed, and important to
their corporate environmental strategy. All were
deemed relevant. The resulting rankings of the top

78

R. Handeld et al. / European Journal of Operational Research 141 (2002) 7087

Table 2
Top 10 criteria for supplier environmental performance
Top 10 most important

Top 10 most easily assessed

1. Public disclosure of environmental record

2. Second tier supplier environmental evaluation
3. Hazardous waste management
4. Toxic waste pollution management
5. On EPA 17 hazardous material list
6. ISO 14000 certied
7. Reverse logistics program
8. Environmentally friendly product packaging
9. Ozone depleting substances
10. Hazardous air emissions management

1. ISO 14000 certied

2. Ozone depleting substances
3. Recyclable content
4. VOC content
5. On EPA 17 hazardous material list
6. Remanufacturing/reuse activity
7. Returnable or reduced packaging
8. Take back or reverse logistics
9. Participation in voluntary EPA programs
10. Public disclosure of environmental record

10 most important and easily assessed items are

shown in Table 2.

4.2. A model of supplier environmental performance

As shown in Table 2, it became clear that
managers tend to rely largely on perceived measures of environmental performance (e.g., ISO
14000, use of ozone depleting substances, use of
hazardous materials, voluntary EPA programs).
However, these measures were not always the most
important metrics in terms of their impact on the
environment. Few of the participants were able to
determine eectively the internal process characteristics of their suppliers, as well as whether they
had any form of recycling or reverse logistics
programs in place. Some of the criteria were considered too time-consuming and dicult to measure, and were subsequently eliminated from the
list. Using the Delphi groups input, we then created a model that rened and consolidated the set
of measures to include those that could be easily
assessed and were important from an environmental standpoint. Another set of criteria for
creating the set of measures was that they should
be easily modied for any particular supplier assessment situation, and capture the relative importance of the buying companys environmental
strategic priorities. For instance, if the buying
company emphasizes recycling, their purchasing
policies should reect this. Finally, the system
should consider multiple attributes simultaneously. For instance, if one supplier in a partic-

ular commodity class performs better in one

category (e.g. recyclable content) but not another
area (ozone emissions), the relative importance of
the categories should be reected in the measurement system. The framework was developed based
on a brainstorming exercise.
The result of the Delphi groups input is shown
in Fig. 2. This gure illustrates the relationship of
each of the major environmental attributes deemed
to be important in a customer/supplier relationship, and includes only EPIs judged by the Delphi
group as appropriate and relatively easy to assess.
The model also includes a number of qualitative
assessments of the customer/supplier relationship
(e.g. The supplier has a record of EPA nes or
The supplier encourages recycling in its plant).
Finally, the model considers the suppliers internal processes and management systems, the customers perception of the suppliers performance
based on third parties, and the suppliers recycling
and waste management activities. A brief description of each performance attribute is provided in
Table 3.
Each of these environmental attributes may be
more or less important in developing an assessment
for a particular suppliers environmental performance. The model is generalizable enough that it
can be used for any type of supplier assessment,
regardless of industry. For instance, under product
attributes, the measures include percent recyclable,
number of recyclable items, ozone depleting substances, hazardous air emissions, and VOC content. If a particular criterion does not qualify as
relevant within the particular suppliers process

R. Handeld et al. / European Journal of Operational Research 141 (2002) 7087

79

Fig. 2. Framework for environmental performance attributes used in AHP model.

technology, it can easily be omitted without loss of

model validity.
With the decision tree model structured, the
process of determining the relative importance of
each criterion and evaluating suppliers begins.
Each criterion is ranked pairwise against the other
criteria. The rankings are made using a scale
ranging from 1 to 9, where 1 means the two criteria
are equally important and 9 means the rst criterion is strongly preferred. These rankings are used
to determine the weights assigned to each criterion.
The companys preference for the suppliers is then
evaluated by ranking the alternatives pairwise on
each criterion using a scale ranging from 1 to 9,
where 1 means the two suppliers are equally preferred and 9 means the rst supplier is strongly
preferred. AHP aggregates these dierent prefer-

ence and importance rankings to produce an environmental performance index for each supplier.
These indices range from 0 to 1, sum to 1 and can
be used as the environmental performance rating
for the supplier in a traditional weighted point
evaluation system.

5. Results of pilot test and discussion

To illustrate the use of our AHP model of
supplier environmental performance, in this section we present three pilot tests used to determine
the eectiveness of the model. The purpose of the
pilot tests was to assess how useful the AHP model
developed in the Delphi group was in an actual supplier evaluation decision. Another major

80

R. Handeld et al. / European Journal of Operational Research 141 (2002) 7087

Table 3
Environmental performance attributes from Delphi group
Performance attributes

Description

Product attributes

This attribute considers the internal recycling activities within the suppliers
organization, as well as the level of toxic and hazardous materials being
consumed or emitted by the organization. This includes both internal processes,
as well as re-design of existing products to eliminate the level of toxic materials
purchased and used in the product/process. This type of data must be collected
through a detailed on-site performance evaluation of the suppliers processes

Waste management

This attribute includes the gross annual solid waste tonnage that goes to landll,
as well as disposition of hazardous materials. These are primary outputs from
the suppliers process, and evidence must be provided directly by the supplier

Labeling/certication

This attribute relies on the extent to which the suppliers processes have been
certied by third parties (government or non-government). One measure is the
extent to which the supplier participates in voluntary eco-labeling systems
(Green Lights, Green Label, etc.). It also measures if the supplier has undergone
third party certication of its environmental systems or activities (ISO 14000
certication would fall into this category.) Finally, the Environmental Protection Agency (EPA) provides a database of companies who regularly use a list of
the 17 most hazardous materials that can be easily checked by a purchasing
organization

Packaging/reverse logistics

This dimension assesses the presence of activities such as remanufacturing/reuse,

returnable or reduced packaging, and reverse logistics systems (where the
supplier is responsible for the pick up and disposal of package from the
customer). This too should be relatively easy to detect on the part of the
customer

Compliance to Government Regs.

This dimension assesses the extent to which the activities of the supplier are
being carried out in a manner consistent with existing and appropriate
regulatory requirements. One indicator of performance on this dimension is
citations and/or nes levied on the supplier. Another is whether air and water
permits are up to date, or whether other violations have taken place. These data
can be easily obtained from the EPA or OSHA (in the US)

Environmental Pgms at the suppliers facilities

This dimension focuses on the presence of environmental systems within the

suppliers management system. These dimensions must be assessed qualitatively,
and include training programs, internal reporting structures, public disclosure
statements, internal mission statements relating to the environment, and supplier
evaluation systems. This information must be collected through an on-site
supplier performance assessment

objective was to understand the strengths and

weaknesses of the tool in dierent purchasing environments.
5.1. Pilot test automotive manufacturer
The rst pilot test was conducted with a purchasing manager from an American automotive
manufacturer. The AHP model was presented to

the manager, details regarding each of the specic

metrics and criteria were discussed, and any
questions the manager had were answered. In the
process of completing the rankings of EPIs, the
manager worked with two suppliers chosen for
the pilot test.
The results of Pilot Test 1 are shown in Table 4.
Supplier 1s environmental performance is 0.574,
while Supplier 2s is 0.426. In this case, Supplier 1

R. Handeld et al. / European Journal of Operational Research 141 (2002) 7087

81

Table 4
Results from pilot test #1
Minimize environmental impact of supplier
Synthesis of leaf nodes with respect to GOAL
Ideal mode
Overall inconsistency index 0.03
S1

0.574

S2

0.426

would be preferred in terms of environmental

performance. This score could then be used in a
broader evaluation system that also considers the
suppliers performance in terms of price, quality,
delivery, service, etc. However, it is interesting to
note that some of the criteria in this case did not
distinguish the two suppliers evaluated. For instance, such areas as recyclable content, VOC
content, solid waste tonnage, hazardous activity at
the site, and others, there was no dierence between the two suppliers. This suggests that such a
matrix could be even further reduced for specic
commodity families, depending on the environmental criteria involved. Similarly, neither supplier
had achieved ISO 14000 certication. Until this
system has diused further, it may have limited
applications in dierentiating supplier environmental performance.
The results of this pilot test were subsequently
shared with the manager involved. The manager
was very favorably impressed with both the AHP
and the resulting outcomes. The manager noted
that the tool helped to frame the issue much more
clearly, and provided a better understanding of
what environmental criteria were really important
in evaluating suppliers.
5.2. Pilot test 2 paper manufacturer
The second pilot test was undertaken with a
paper manufacturer, who evaluated the performance of two pulp suppliers. The process of conducting this pilot test, and the third one, was
eectively the same as for the rst pilot test. In this
case, however, the two suppliers performed equally
well on all of the criteria, and hence were assigned

0.5 each on all criteria! This, of course led to both

suppliers achieving environmental performance
scores of 0.5. In this case, the tool was unable to
distinguish between the two suppliers. Followup
questioning of the manager yielded an explanation
that In the pulp industry, the government has
very tight restrictions on processes and waste
management. We do not worry about our suppliers environmental performance, because we
know that if they have any problems, the government will be the one to shut them down! The
manager acknowledged that he did not regularly
visit suppliers to understand what types of proactive environmental programs were underway,
and hence ranked the two suppliers equally on
these items. This outcome suggests that for industries with heavily regulated processes, the tool
may not be eective, unless managers are prepared
to perform more in-depth analysis via on-site
supplier evaluations.
5.3. Pilot test 3 apparel manufacturer
The third pilot test was conducted with a supply
line manager at a major apparel manufacturer.
The manager was presented with detailed descriptions of the environmental criteria and asked
to rate their importance and three suppliers performance on the criteria. Because the manufacturer had selected a corrugated board supplier,
environmental criteria related to solid waste
management dominated the importance matrices
(e.g., pre/post consumer recycled content and the
recyclability of the purchased item accounted for
74.8% of the total Product Attributes importance). In completing the importance matrices, the

82

R. Handeld et al. / European Journal of Operational Research 141 (2002) 7087

Table 5
Results from pilot test #3
Minimize environmental impact of supplier
Synthesis of leaf nodes with respect to GOAL
Ideal mode
Overall inconsistency index 0.03
S1

0.580

S2

0.210

S3

0.210

manager also focused on regulatory violations.

Concerning the Government Regulations criteria, recent nes accounted for 71.4% of the total
importance.
Of the three suppliers the manager evaluated,
Supplier 1 dominated the other two. Table 5 presents the AHP comparison of the suppliers. Supplier 1s score of 0.580 is greater than the sum of
the other two suppliers scores of 0.210. Analysis
of the supplier preference matrix showed that
Supplier 1 signicantly outperformed the other
two suppliers on the important criteria of solid
waste tonnage, recycled content of the purchased
item, and assessed non-compliance nes. In fact,
for each of the six main environmental criteria,
Supplier 1 outperformed both of the other suppliers (see Table 6).
Discussion with the supply line manager after he
had evaluated the suppliers on the environmental
criteria emphasized the value of the methodology.

Table 6
Supplier performance from pilot test
Criterion

Supplier
1

Supplier
2

Supplier
3

Product attributes
Waste
management
Labeling
/certication
Packaging/Rev.
Log.
Government
Regs.
Environmental
programs

0.364
0.720

0.318
0.140

0.318
0.140

0.714

0.143

0.143

0.377

0.311

0.311

0.714

0.143

0.143

0.495

0.252

0.252

Using the AHP model caused the manager to

consider issues he had not previously, including
VOC content of the purchased items and the suppliers third party certication status. The manager
also described how using the AHP model made him
consider relationships he had not thought of before, for example between ISO 14000 certication
status and EPA 17 chemical use. The manager
stated that using the AHP model will change the
way suppliers will be evaluated in the future.
More questions will be asked about how the
product is made and decisions made accordingly.

6. Future research applying the method to other

areas of ECP
As environmental issues become more important in business, the role of purchasing managers
will become increasingly more important. This
importance stems from a simple fact of purchasing
life the purchasing manager is ultimately responsible for evaluating and selecting suppliers
who can proactively contribute to their rms environmental strategy and whose products and
services meet or exceed government environmental
regulations. Strategically, buyers should work with
suppliers to explore the mutually benecial results
of greening purchasing processes. Green issues
represent an interesting opportunity for purchasing and supply management. Environmentally responsible processes can point out ways to advance
other areas of purchasing and supply management
strategy. Environmental imperatives can spur new
ways of thinking and acting on total quality and

R. Handeld et al. / European Journal of Operational Research 141 (2002) 7087

continuous improvement. In this section, we

discuss limitations of the AHP model developed
here, and how it can be improved and further integrated in the decision-making structure shown in
Fig. 1.
6.1. Limitations and possible improvements to the
model
Because the model was developed through a
Delphi group of environmental experts, some
purchasing managers did not value all the environmental measures presented in the model. This
was demonstrated in the pilot studies. A number
of improvements can be made to the model to
resolve this issue. In the future, a Delphi group
could be used to rene the model, and should include purchasing managers who may not be directly familiar with environmental metrics. This
will help to ensure that the tool is practical from an
actual users standpoint.
The second limitation to the model is data
availability. In both Pilot Test 1 and Pilot Test 2,
the managers ranked all the environmental criteria
equally. However, it was apparent that the managers had better access to Criteria 3 (Labeling) and
Criteria 5 (Government Regulations) than the
other criteria, which dealt specically with the
suppliers processes. It appears that the model may
be skewed towards these third-party criteria, and
the ranking of the other criteria may reect the
managers perception of data availability instead
of criterion importance.
Resolving these types of issues is not an easy
task. Much of the information needed for assessing environmental criteria is simply not available
(or it can be obtained only at a high cost). Also,
many of these criteria are qualitative in nature.
The values assigned to them may reect the belief
structure of the people involved. Finally, getting
suppliers to discuss these issues is dicult because
environmental performance is surrounded by
social desirability (Messick, 1959). That is,
people want to appear environmentally responsible. As a result, the interviewer will tend to receive
responses that reect what the respondents think
the interviewer wants to hear, rather than a more
accurate account.

83

One way this problem can be overcome in the

future is to use a detailed interview protocol that
asks the questions so that they appear to be nonobtrusive. Prior research has established that although eliminating social desirability altogether
is dicult, there are methods to minimize the eect
of this potential source of bias. These methods
couch the interview questions in such a way that
the supplier will provide a response that is closest
to the truth.
The nal issue is whether the tool is superior to
traditional methods of environmental performance
assessment, such as checklists or weighted point
systems. Based on our pilot studies and review
of companies existing environmental management systems, it is clear that existing systems do
not generally provide the detail embodied in our
model. However, it may be that in certain cases,
the model does not oer additional benets to
these traditional methods. Specically, if the suppliers within the commodity being researched do
not utilize any hazardous materials, utilize processes that do not generate any waste, or are uniformly ISO 14000 certied, the model may not
oer any additional benets to a simple checklist
or weighted point assessment. However, if the
supplier does not meet any of these criteria, the
tool can potentially oer some important insights.

6.2. Extensions of the model to ECP

There are several extensions to the AHP model
that may be possible in the future. The rst is a
system of equations that can help translate supplier environmental performance into cost metrics.
As competition among businesses intensies on a
global scale, companies will continuously be
looking for ways to reduce wastes or costs,
maintain a exible corporate strategy, and improve their position in the marketplace. The environment is important, especially in its eect on
costs. For instance, a suppliers environmental
penalties and nes will ultimately be absorbed into
the products cost and become part of their piece
price. Thus, environmental costs should be integrated with the Total Cost of Ownership system, which includes not only the piece price of the

84

R. Handeld et al. / European Journal of Operational Research 141 (2002) 7087

unit, but also other costs of non-conformance such

as poor quality, delivery, and environmental performance. While the rst two criteria have been
included in other systems by such companies as
Texas Instruments (see Monczka et al., 1997), the
inclusion of environmental performance as a part
of this equation remains largely untapped. One
method of achieving this might be to apply the
weights of an AHP model to a set of cost equations associated with non-performance, thereby
including this as an element of total cost. These
cost equations will probably need to be done on a
case-by-case basis. Some initial environmental cost
calculation methods have been introduced by the
Environmental Protection Agencys Environmental Accounting Project (U.S. EPA, 1995). This
primer suggests that direct costs are often used,
but hidden costs of poor environmental performance (inspections, remediation, contingent costs,
and image and relationship costs) are often ignored in most environmental accounting programs.
The obvious next step is to assimilate supplier
environmental performance information into a
supplier database that could be used by all purchasing managers and engineers in all divisions of
the company. As shown in Fig. 1, information on
supplier performance should be monitored periodically and used regularly within the strategic
planning process to revise and change purchasing
strategies. Each supplier should receive an environmental report card that is updated on a realtime basis, and used as another element within the
product development process. This has been done
to some extent in some companies. At a major
manufacturer of electronics in the US, a central
purchasing group known as the Computer Engineering Technology Center is responsible for
working with suppliers on environmental requirements. The group is also responsible for qualifying
suppliers processes and recording information
into a centralized database that is made available
to all purchasing groups at the dierent divisions.
The group developed a patented supplier qualication process used by all the dierent manufacturing divisions. Because suppliers are qualied by
process, any parts produced by suppliers qualied
process were also qualied. The integrated data-

base makes this company-wide supplier process

qualication possible.
The AHP system could also be used to expose
and identify poor environmental performers
within the supply base, and to help direct supplier
development strategies. Identifying poor performers can lead to modications in the commodity
strategy. For instance, buyers may decide to work
directly with suppliers to explore the mutually
benecial results of environmental performance.
6.3. Concluding comments
In measuring current practice against intended
actions, there is a gap in the assessment of suppliers as to their environmentally responsible processes and products. This gap is not only in
the form of a framework for supplier decision
making when dealing with environmental issues,
but also exists in measurements and supplier
assessment programs. We have proposed one
such system, AHP, that may help in integrating
environmental criteria in the sourcing decision
process.
Future research questions that arise as a result
of this study include:
Does a high ranking in the product and supplier
assessments equate to better bottom line performance?
How do we involve the appropriate specialists
in environmental sourcing decisions?
How can we better access data to rate suppliers
environmental performance?
At what level of strategy formulation is it best
to have this information?
Do poor environmental scores of the suppliers
translate into higher costs? If so, how can this
information be captured?
Can ISO 14000 be used as a de facto representation of good environmental performance?
Future studies will need to address these questions. Unless purchasing managers are ultimately
driving these strategies in conjunction with other
constituents both inside and outside the organization, it will become increasingly dicult to truly
become a green purchaser.

R. Handeld et al. / European Journal of Operational Research 141 (2002) 7087

Appendix A
Generally speaking, AHP requires the decisionmaker to describe up to four dierent components:
the objective, the relevant criteria, the relevant
sub-criteria if any, and the alternatives to be
evaluated. AHP begins by asking the decisionmaker to consider each of the criteria pairwise and
assign a relative importance to the criteria, often
on a nine point Likert-type scale where 1 represents equal importance and 9 represents much
more importance. These relative importances are
then used to construct a preference matrix, from
which the weights for each criterion will be extracted (Saaty, 1980). Note that the preference
matrix is a square reciprocal matrix.
These subjective estimates of relative importance are used to generate the weights assigned to
each of the criteria. Saaty (1980) recommends
using a normalized eigenvector approach, which
is best implemented by computer software such
as Expert Choice. AHP then evaluates the performance of the alternatives relative to these
weighted criteria.
The same method is followed to describe the
relative performance of each alternative for each
of the criteria. For each criterion, a reciprocal
preference matrix is generated that shows the
trade-os between each alternative on that one
criterion. This matrix is then used to calculate a
vector of weights that denote the performance of
the alternatives on that one criterion. When this is
done for all criteria, the result is an n  m matrix of
performance weights, where n denotes the number
of criteria and m the number of alternatives. To
calculate the overall score for each alternative, the
matrix of criteria weights is multiplied by the
matrix of performance.
The literature concerning AHP has proceeded
in two distinct streams: debate on the theoretical
soundness of the technique (Stam and Silva, 1997)
and application of AHP to various multi-criterion
problems. Application areas include spare parts
inventory (Gajpal et al., 1994), inventory classication (Partovi and Hopton, 1994), purchase volume allocation across multiple vendors (Partovi
and Hopton, 1994), supplier selection (Barbarosoglu and Yazgac, 1997), robot selection (Goh,

85

1997), logistics (Tyagi and Das, 1997), capacity

expansion through capital investment (Boucher
et al., 1997), business portfolio planning, economic
planning, conict resolution, energy policy, transportation logistics, retail store location, and tourism development planning (Calantone et al., 1989;
Liberatore and Stylianou, 1993; Wind and Majahan, 1981; Wind and Saaty, 1980; Zahedi, 1986).
One major weakness of the application-oriented
AHP literature is that it tends to focus on the
mechanics of AHP, instead of on the theoretical
and practical results associated with implementing AHP. For example, these articles describe in
great detail the manipulation of square reciprocal
symmetric matrices, but, aside from the cursory
nod to their problem context, rarely mention how
theory and practice are advanced by the AHP
solution.
The second stream of study deals with the
mathematics of AHP to prove its soundness as a
problem solving method. The debate has raged for
more than a decade concerning whether AHP is
robust enough to be unaected by the addition or
deletion of irrelevant alternatives (Schenkerman, 1997). In addition to the unresolved problem
of rank reversal, AHP also can induce a rank order
when none exists (Schenkerman, 1997). There has
not been sucient time for the pro-AHP camp to
respond to this assertion, so it would be premature
to dismiss AHP as a valuable tool for multi-criterion decision analysis. However, issues of validity
must be acknowledged.
One major advantage of AHP is that the construction of the hierarchy diagram forces the decision-maker to structure the problem. Requiring
the decision-maker to explicitly dene the objective and relevant criteria, and to assign numerical
values for their relative importance forces the decision-maker to consider trade-os in some detail.
Since managers typically rely on only a subset of
information (e.g. heuristics), AHP helps managers
make more rational decisions by structuring the
decision as they see it and then fully considering
all available information on the criteria and alternatives. In other words, the process of developing the AHP model provides value on its own,
independent of the nal evaluation of the alternatives.

86

R. Handeld et al. / European Journal of Operational Research 141 (2002) 7087

References
Allenby, B., 1993. Supporting environmental quality: Developing an infrastructure for design. Total Quality Environmental Management 2 (3), 303308.
Barbarosoglu, G., Yazgac, T., 1997. An application of the
analytic hierarchy process to the supplier selection problem.
Production and Inventory Management Journal 38 (1), 14
21.
Boucher, T.O., Gogus, O., Wicks, E.M., 1997. A comparison
between two multiattribute decision methodologies used in
capital investment decision analysis. The Engineering Economist 42 (3), 179201.
Calantone, R., Di Benedetto, C.A., Schmidt, J.B., 1998. Using
the analytical hierarchy process in new product screening. Journal of Product Innovation Management (forthcoming).
Calantone, R.A., Di Benedetto, R.A., Meloche, M., 1989. The
analytic hierarchy process as a technique for retail store
location selection. Journal of Business Strategies 6 (1), 61
74.
Curkovic, S., 1998. Investigating the linkage between total
quality management and environmentally responsible manufacturing. Unpublished Dissertation, Department of Marketing and Supply Chain Management, Michigan State
University, April.
Ditz, D., Ranganathan, J., 1997. Measuring up: Toward a
Common Framework for Tracking Corporate Environmental Performance. World Resources Institute, Washington,
DC.
Environment: Value to Business, 1998. Global Environmental
Management Initiative, Washington, DC.
Gajpal, P.P., Ganesh, L.S., Rajendran, C., 1994. Criticality
analysis of spare parts using the analytic hierarchy process.
International Journal of Production Economics 35, 293
297.
Goh, C.H., 1997. Analytic hierarchy process for robot selection. Journal of Manufacturing Systems 16 (5), 381
386.
Gupta, M.C., 1995. Environmental management and its
impact on the operations function. International Journal of Operations and Production Management 15 (8),
3451.
Handeld, R.B., Melnyk, S.A., 1996. GreenSpeak. Purchasing
Today (July), 3236.
Handeld, R.B., Pannesi, R., 1995. Antecedents of leadtime
competitiveness in make-to-order manufacturing rms.
International Journal of Production Research 33 (2),
511537.
Handeld, R.B., Walton, S.V., Seegers, L., Melnyk, S.A., 1997.
The Green value chain: Practices from the furniture
industry. Journal of Operations Management 15 (4).
Klassen, R.D., McLaughlin, C.P., 1996. The impact of
environmental management on rm performance. Management Science 42 (8), 11991214.
Klassen, R.D., 1993. The integration of environmental issues
into manufacturing: Toward an interactive open-systems

model. Production and Inventory Management Journal 34

(1), 8288.
Leenders, R.M., Feeron, E.F., 1993. Purchasing and Materials
Management, Tenth ed. (Chapter 6).
Liberatore, M., Stylianou, A.C., 1993. The development
managers advisory system: A knowledge-based DSS tool
for project assessment. Decision Sciences 24 (5), 953976.
Makower, J., 1994. Beyond the Bottom Line. Simon &
Schuster, New York, NY.
Malhotra, M.K., Steele, D.C., Grover, V., 1994. Important
strategic and tactical manufacturing issues in the 1990s.
Decision Sciences 25 (2), 189214.
Melnyk, S.A., Smith, R.T., 1996. Green Manufacturing.
Society for Manufacturing Engineering, Dearborn, MI.
Messick, S., 1959. Dimensions of Social Desirability. Educational Testing Service, Princeton, NJ.
Monczka, R.M., Trent, R.J., Callahan, T., 1993. Supply base
strategies to maximize supplier performance. International
Journal of Physical Distribution and Logistics Management
23 (4), 4254.
Monczka, R.M., Trent, R.J., Handeld, R.B., 1997. Purchasing
and Supply Chain Management. Southwestern Publishing,
College Division, Cincinnati, OH.
Partovi, F.Y., Hopton, W.E., 1994. The analytic hierarchy
process as applied to two types of inventory problems.
Production and Inventory Management Journal 35 (1), 13
19.
Peterson, J., 1996. Stop it and shrink it. Purchasing Today
(July), 2831.
Porter, M.E., Van der Linde, C., 1995. Green and competitive
ending the statement. Harvard Business Review (SeptemberOctober), 120134.
Porter, M.E., Van der Linde, C., 1995b. Toward a new concept
of the environment-competitive relationship. Journal of
Economic Perspectives 9 (4), 97118.
Richardson, J., 1993. Parallel sourcing and supplier performance in the Japanese automobile industry. Strategic
Management Journal 14, 339350.
Saaty, T.L., 1980. The Analytical Hierarchy Process. McGrawHill, New York, NY.
Saaty, T.L., 1990. How to make a decision The analytic
hierarchy process. European Journal of Operational Research 48, 926.
Sarkis, J., Rasheed, A., 1995. Greening the manufacturing
function. Business Horizons 38 (5), 1727.
Schenkerman, S., 1997. Inducement of nonexistent order by the
analytic hierarchy process. Decision Sciences 28 (2), 475
482.
Stam, A.P., Silva, D., 1997. Stochastic judgments in the AHP:
The measurement of rank reversal probabilities. Decision
Sciences 28 (3), 655688.
Tyagi, R., Das, C., 1997. A methodology for cost versus service
trade-os in wholesale location-distribution using mathematical programming and analytic hierarchy process. Journal of Business Logistics 18 (2), 7799.
United States Environmental Protection Agency, 1995. An
Introduction to Environmental Accounting as a Business

R. Handeld et al. / European Journal of Operational Research 141 (2002) 7087

Management Tool: Key Concepts and Terms. Oce of
Pollution Prevention and Toxics, Washington, DC.
Wind, J., Majahan, V., 1981. Designing product and business
portfolios. Harvard Business Review 59 (1), 155165.
Wind, J., Saaty, T., 1980. Marketing applications of the
analytic hierarchy process. Management Science 26 (7),
641658.

87

Winsemius, P., Guntram, U., 1992. Responding to the environmental challenge. Business Horizons 35 (2), 1220.
Wood, D.J., 1991. Corporate social performance revisited.
Academy of Management Review 16 (4), 691718.
Zahedi, F., 1986. The analytic hierarchy process A survey
of the method and its applications. Interfaces 16 (8), 96
108.