Supplier Selection Problem: A Multi-Objective Model Considering both All-Unit and Incremental Discounts with Multiple-Item

Abstract

In supply chain management, supplier selection has a special importance. In this paper, a multi-objective model is developed based on decisions on quality, service level and cost of purchased goods. The difference of this research is to consider discount parameter into the model. A numerical example for three proposed suppliers is interpreted. The model has been solved in two steps: 1-single-objective, 2-multi-objective approach. According to Lpmetric solution, results can predict optimum selection of suppliers as well as the purchased goods amount. The results show that the single objective problem has better result than multi-objective function. This paper is organized by six sections: in next section, some previous studies and researches on supplier selection problem considering discount and non-considering discount have been discussed. In section 3, mathematical formulation of the supplier selection model considering all-unit and incremental with multiple-item is presented. In section 4, aLP metrics solution is dedicated. In section 5, a numerical example is given and the results are presented. Finally in section 6, conclusions of this research are discussed.