Forecasting sustainability performances of firms using grey theory and Markov models

Purpose Sustainability has been receiving increasing attention in recent times, due to increasing pressures from consumers and stakeholders. Based on few selected indicators, we suggest a method for calculating and forecasting the degree of sustainability supply chain considering the case of the IKEA Group. Design/methodology/approach In order to predict the sustainability of IKEA’s supply chain, utilizing IWAY fulfillment scores, this research uses the concept and theory of grey prediction models and moving probability-based Markov models. Findings According to the findings of prediction, we observe that the level of supply chain sustainability is declining for the case in the forecast year 2022. The results are perceived as per the outcomes of the first-order, one-variable-based grey prediction model (GM (1, 1) model) and the grey moving probability state Markov model-based error correction. Research limitations/implications Operationalizing sustainability, we consider the contribution a company’s supply chain toward the advancement of human rights, ethical labor practices, environmental improvement and anti-corruption principles into the account of supply-chain sustainability. Practical implications In order to understand the future trends in the supply chain sustainability performances of the firms and make corrective actions, managers may take a note on the results of prediction and they can subsequently work on the policy implications. Originality/value We build an advanced prediction model for forecasting the level of sustainability performances for a case firm using the indicator of human rights, ethical labor practices, environmental improvement and anti-corruption principles.