A Fuzzy Based Mathematical Model for Vendor Selection and Procurement Planning with Multiple Discounts in the Presence of Supply Uncertainty

Abstract

Supplier selection and material procurement planning are the most important issues in supply chain management. This decision is complicated when the buyers face with discount price schemes. In real situation, each supplier may apply different methods such as different types of discount schedules and various types of payment in order to increase market share. In this situation, buyers try to select the best supplier/s by considering all tangible and intangible factors which may be included in this decision problem. Mohammad Ebrahim and Razmi (2009) introduced a Meta heuristic model in order to select the best suppliers and determine the procurement plan under two types of discount offers. In this paper, a fuzzy bi-objective model is proposed for single item single period supplier selection and purchasing problem under capacity constraint, supply uncertainty and budget limitation. This model includes different kinds of discount (all-unit discount, incremental discount). In addition, different methods for payments which ordinary may be proposed by each supplier are considered in this model. Finally, an interactive fuzzy programming approach (TH method), -constraint method and reservation level driven Tchebycheff procedure (RLTP) are applied to solve this bi-objective model. The efficiency of each method is evaluated by using an additive utility function which is offered by decision maker.