A Bounded Rationality Model for Sustainable Supplier Selection for New Products: A Whole Product Life Cycle Perspective

ABSTRACT When developing new products, companies must select the most appropriate sustainable suppliers at the early stages of product development to achieve long‐term sustainability and reduce the high risk of failure inherent in the new product development. Moreover, new products have different market characteristics at each stage of the PLC, which leads to different psychological behaviours among decision‐makers. However, existing research ignores these characteristics of different PLC stages and the bounded rationality of decision‐makers. To overcome above shortcomings, this paper first introduces a variable coefficient into step‐wise weight assessment ratio analysis (SWARA) to obtain criteria weights more reasonably. Then, prospect and regret theories are integrated to comprehensively consider the risk attitude, loss avoidance and regret avoidance psychology of decision‐makers and thereby rank potential suppliers. Finally, the effectiveness of the proposed model is illustrated using the case of seat supplier selection in a renowned global luxury vehicle manufacturer.