MULTI-CRITERIA SUPPLIER SELECTION AND PURCHASE PROBLEM

Year 2018, Volume: 36 Issue: 4, 1255 - 1264, 01.12.2018

Ercan Şenyiğit Bilal Babayiğit

Abstract

In this paper, multi-criteria supplier selection and purchase problem (MCSSPP) is introduced and a solution approach for MCSSPP is proposed. MCSSPP is about purchasing of the raw materials from the best suppliers allowed for the amount of the defect between echelons for a single-product multi-echelon supply chain network (SMSCN). For MCSSPP, the quality, price and distance criteria which had different units were considered. As it is not possible to use different criteria with different units in mathematical model, an alternative mathematical model Ng was used in this study for the solution approach. In the solution approach, first, the best supplier was determined and then SMSCN was optimized with LINDO program by using the mixed-integer linear programming model to minimise the total costs. Total costs comprised of the transportation cost of raw material s from supplier i to factory, the purchasing cost of raw material s from supplier i, the unit transportation cost of product from factory to distribution centre m and unit transportation cost of product from distribution centre m to customer n, the fixed operating cost of factory, the fixed operating cost of distribution centre m, and the production cost. MCSSPP and the proposed solution approach were applied to a chair product of enterprise XYZ in Kayseri, Turkey. The chair product had four raw materials, and each raw material had two suppliers. The mathematical results were compared for the best and the worst models. From 8 different suppliers, the total cost of the best model was obtained as 553926. 6 TLs with 17328 units carcass groups, 17146 units seat groups, 17328 units sponges and 17328 units packages. However, for the worst model, the total cost was 562834.9 TLs with 16964 units carcass groups, 16964 units seat groups, 17143 units sponges and 17143 units packages purchased. In conclusion, by utilizing the proposed mathematical model, the total cost was reduced %1.61 (8908.3 TLs).

Keywords

Supply chain management, single-product multi-echelon supply chain network design, optimization, multi-criteria supplier selection and purchase problem.

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