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Management Science Letters

ISSN 1923-9343 (Online) - ISSN 1923-9335 (Print)
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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.

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Journal: Management Science Letters | Year: 2018 | Volume: 8 | Issue: 10 | Views: 2082 | Reviews: 0

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