Strategic supplier selection and order allocation under ESG requirements: A case study of the rice export sector

Abstract

In the context of increasingly tightened international import regulations related to sustainable development criteria, while "ESG" (Environmental-Social-Governance) remains a relatively new concept in Vietnam, many export enterprises have not yet fully implemented these criteria. To address this challenge, this study proposes an optimization model using a mixed-integer linear programming (MILP) approach to maximize the profit while simultaneously integrating cost constraints and ESG criteria. A typical case study is applied to the rice export supply chain, using simulated input data to reflect a plausible range of supplier characteristics, including pricing, supply capacity, environmental standards, labour conditions, and governance policies. The results identified a list of suppliers that meet ESG requirements, ensure a stable supply over a one-year planning horizon, and help enterprises enhance their access to export markets. The study provides an effective decision-support tool for sustainable supply chain management in the rice sector and offers potential applications in other agricultural sectors.