Minimizing the supplying cost of leverage items: a mathematical approach

Abstract

In the new competitive environment, selecting and planning of the supply chain is very crucial and involves evaluation of many factors. Different approaches have been applied to assess the supplier/s. Most of these studies are based upon the supplier/s' capabilities. It may be neither rational nor economical to deal with each item via a generic material control system. Furthermore, supplier/s selection not only depends on suppliers' capability, but also depends on the nature and characteristics of the parts. Little attention is given to decisions on the appropriate selecting of supplier/s, and assigning order quantities to them, especially, in case of multiple sources considering their performance and materials’ characteristics. In this paper two models are presented which locate the optimal supplier/s regarding supplier/s' capabilities and materials’ characteristics for leverage items based on references [1 and 2]. The first one is a G.P. model which considers constraints of lead-time, quality, demand, supplier/s capacity and budgets in a dynamic condition. The second one considers the problem in a contingent environment and considers criteria with normal distributions. Each model follows by an illustrative numerical example and sensitivity analysis which demonstrate the effectiveness and validation of the model