Growing Science » Management Science Letters » Order allocation in a multiple-vendor and quantity discount environment: A multi-objective decision making approach

Journals


MSL Volumes


Management Science Letters

ISSN 1923-9343 (Online) - ISSN 1923-9335 (Print)
Quarterly Publication
Volume 8 Issue 10 pp. 975-990 , 2018

Order allocation in a multiple-vendor and quantity discount environment: A multi-objective decision making approach Pages 975-990 Right click to download the paper Download PDF

Authors: Hengameh Hadian, Abdolhamid Eshraghniaye Jahromi, Mahnoosh Soleimani

DOI: 10.5267/j.msl.2018.7.003

Keywords: Supplier selection, Order allocation, Discount, AHP, Multi-objective programming, Supply chain management

Abstract: Integrated supplier selection and order allocation is a complex problem that is important for both designing and operating supply chains. It becomes especially complicated when quantity discounts are considered at the same time. Under such circumstances, most studies often formulate the problem as a Multi-Objective Linear Programming problem (MOLP), and then transform it to a Mixed Integer Programming problem (MIP) to handle the inherited multi-objectives, simultaneously. But, objectives are not of equal importance and in this approach scaling and subjective weighting often are not considered. In addition, some of the studies that use weighting method to solve the MOLP, usually ignore to normalize the coefficients. However, as different coefficients have different units such as cost or number coefficients, so weighted summation will be meaningless. Furthermore, in most of the studies only quantitative criteria are considered in mathematical model. But, the importance of some qualitative criteria persuade decision maker to consider other affective criteria as well as cost. In this study, in order to ease the problem and to obtain a more reasonable compromised solution for order allocating among suppliers, an integration of analytical hierarchy process and linear integer and multi-objective programming is proposed. The large number of criteria and attributes are employed in this problem and they are employed in a comprehensive model to solve the multi-objective problem and to find the most preferred non dominated solutions by considering decision maker’s (DM) preferences. Some illustrative examples are solved using LINGO and the results are compared. The sensitivity analysis and comparing the results with one of the well-known studies in the literature has demonstrated the flexibility and efficiency of the proposed model to deal with large sized problems and incorporate different purchasing policies, easily and in a short amount of time.

How to cite this paper
Hadian, H., Jahromi, A & Soleimani, M. (2018). Order allocation in a multiple-vendor and quantity discount environment: A multi-objective decision making approach.Management Science Letters , 8(10), 975-990.

Refrences
Amid, A., Ghodsypour, S. H., & O’Brien, C. (2009). A weighted additive fuzzy multiobjective model for the supplier selection problem under price breaks in a supply chain. International Journal of Produc-tion Economics, 121(2), 323-332.
Berger, P. D., Gerstenfeld, A., & Zeng, A. Z. (2004). How many suppliers are best? A decision-analysis approach. Omega, 32(1), 9-15.
Bohner, C., & Minner, S. (2017). Supplier selection under failure risk, quantity and business volume dis-counts. Computers & Industrial Engineering, 104, 145-155.
Burke, G. J., Carrillo, J., & Vakharia, A. J. (2008). Heuristics for sourcing from multiple suppliers with al-ternative quantity discounts. European Journal of Operational Research, 186(1), 317-329.
Chai, J., Liu, J. N., & Ngai, E. W. (2013). Application of decision-making techniques in supplier selection: A systematic review of literature. Expert Systems with Applications, 40(10), 3872-3885.
Demirtas, E. A., & Üstün, Ö. (2008). An integrated multiobjective decision making process for supplier selection and order allocation. Omega, 36(1), 76-90.
Demirtas, E. A., & Ustun, O. (2009). Analytic network process and multi-period goal programming inte-gration in purchasing decisions. Computers & Industrial Engineering, 56(2), 677-690.
Ebrahim, R. M., Razmi, J., & Haleh, H. (2009). Scatter search algorithm for supplier selection and order lot sizing under multiple price discount environment. Advances in Engineering Software, 40(9), 766-776.
Ghodsypour, S. H., & O’brien, C. (2001). The total cost of logistics in supplier selection, under conditions of multiple sourcing, multiple criteria and capacity constraint. International journal of production eco-nomics, 73(1), 15-27.
Ho, W., Xu, X., & Dey, P. K. (2010). Multi-criteria decision making approaches for supplier evaluation and selection: A literature review. European Journal of operational research, 202(1), 16-24.
Hong, G. H., Park, S. C., Jang, D. S., & Rho, H. M. (2005). An effective supplier selection method for constructing a competitive supply-relationship. Expert Systems with Applications, 28(4), 629-639.
Kamali, A., Ghomi, S. F., & Jolai, F. (2011). A multi-objective quantity discount and joint optimization model for coordination of a single-buyer multi-vendor supply chain. Computers & Mathematics with Applications, 62(8), 3251-3269.
Katsikeas, C. S., Paparoidamis, N. G., & Katsikea, E. (2004). Supply source selection criteria: The impact of supplier performance on distributor performance. Industrial marketing management, 33(8), 755-764.
Kawtummachai, R., & Van Hop, N. (2005). Order allocation in a multiple-supplier environ-ment. International Journal of Production Economics, 93, 231-238.
Kokangul, A., & Susuz, Z. (2009). Integrated analytical hierarch process and mathematical programming to supplier selection problem with quantity discount. Applied mathematical modelling, 33(3), 1417-1429.
Lambert, D. M., & Cooper, M. C. (2000). Issues in supply chain management. Industrial marketing man-agement, 29(1), 65-83.
Mendoza, A., & Ventura, J. A. (2008). An effective method to supplier selection and order quantity allo-cation. International Journal of Business and Systems Research, 2(1), 1-15.
Min, H. (1994). International supplier selection: a multi-attribute utility approach. International Journal of Physical Distribution & Logistics Management, 24(5), 24-33.
Prahinski, C., & Benton, W. C. (2004). Supplier evaluations: communication strategies to improve suppli-er performance. Journal of operations management, 22(1), 39-62.
Ramasesh, R. V., Ord, J. K., Hayya, J. C., & Pan, A. (1991). Sole versus dual sourcing in stochastic lead-time (s, Q) inventory models. Management science, 37(4), 428-443.
Saaty, T. L. (1990). How to make a decision: the analytic hierarchy process. European journal of opera-tional research, 48(1), 9-26.
Sawik, T. (2014). Joint supplier selection and scheduling of customer orders under disruption risks: Single vs. dual sourcing. Omega, 43, 83-95.
Setak, M., Sharifi, S., & Alimohammadian, A. (2012). Supplier selection and order allocation models in supply chain management: a review. World applied sciences journal, 18(1), 55-72.
Shih, H. S., Shyur, H. J., & Lee, E. S. (2007). An extension of TOPSIS for group decision mak-ing. Mathematical and Computer Modelling, 45(7-8), 801-813.
Ting, C. J., Tsai, C. Y., & Yeh, L. W. (2007). The use of particle swarm optimization for order allocation under multiple capacitated sourcing and quantity discounts. Industrial Engineering & Management Systems, 6(2), 136-145.
Tsai, W. C., & Wang, C. H. (2010). Decision making of sourcing and order allocation with price dis-counts. Journal of Manufacturing Systems, 29(1), 47-54.
Weber, C. A., & Current, J. R. (1993). A multiobjective approach to vendor selection. European journal of operational research, 68(2), 173-184.
Weber, C. A., Current, J. R., & Benton, W. C. (1991). Vendor selection criteria and methods. European journal of operational research, 50(1), 2-18.
Xia, W., & Wu, Z. (2007). Supplier selection with multiple criteria in volume discount environ-ments. Omega, 35(5), 494-504.

Journal: Management Science Letters | Year: 2018 | Volume: 8 | Issue: 10 | Views: 2127 | Reviews: 0

Related Articles:

Add Reviews

Name:*
E-Mail:
Review:
Bold Italic Underline Strike | Align left Center Align right | Insert smilies Insert link URLInsert protected URL Select color | Add Hidden Text Insert Quote Convert selected text from selection to Cyrillic (Russian) alphabet Insert spoiler
Security Code: *

® 2010-2024 GrowingScience.Com