A hybrid model for supplier selection and order allocation in supply chain

Abstract

Performance of a supply chain highly depends on its suppliers and therefore, appropriate selection of them is of great importance. This paper presents an integrated model of an MCDM method and a mathematical programming in order to select suppliers and determine lot sizes in the supply chain. The proposed framework comprises two main sub-models; the qualitative sub-model seeks to evaluate the suppliers by means of Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS). Then, in the quantitative sub-model, a mixed integer nonlinear program is proposed in order to determine the optimal orders allocated to each supplier. Fuzzy multi-objective method (TH) is used to tackle complexity of the model. The most notable features of the proposed model is considering different quality levels and related defective rates as well as partial supplier switch. Finally, to demonstrate applicability of the proposed model and superiority of the developed algorithm, several problem instances are generated and solved.