AN INTEGRATED FUZZY-LINEAR PROGRAMMING APPROACH FOR A SUPPLIER SELECTION PROBLEM: A CASE WITH MULTI-SOURCING AND MULTI-PRODUCT SCENARIOS
Keywords:
Supplier selection, fuzzy MCDM, multi-sourcing, multi-products, total value of purchasing (TVP)Abstract
In today’s highly competitive environment, an effective supplier selection process is very important to the success of any organization. It represents one of the most important functions to be performed by the purchasing department as a multi-criteria decision making (MCDM) problem, which is affected by quantitative and qualitative (conflicting) factors. Since there are major risks and a number of uncertainties in the decision, such as risks of not having sufficient raw materials to meet their fluctuating demand, incorporating the uncertainty of demand and supply capacity into the optimization model results in a robust selection of suppliers. In this study, the fuzzy set theory is employed due to the presence of vagueness and imprecision of information and an integrated fuzzy multi-objective linear model is introduced to deal with the problem. The proposed model integrates previous decision making approaches to compensate for any drawbacks that may exist in each approach and is capable of incorporating multiple products with multiple suppliers (sourcing). The model is then explained by an illustrative example, showing that the proposed approach, which combines total value of purchasing (TVP) to be one 1 of the objectives, as compared to the other three 3 previous approaches, can handle realistic situations better through the a sensitivity analysis. This gives insights into the robustness of the solution with respects to information vagueness related to the decision makers (DMs)’ decisions.
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