A bi-level programming model for supplier selection in constructing logistics service supply chain

Abstract

In order to reduce the subcontract cost and improve service quality gradually in constructing logistics service supply chain, a bi-level programming model to describe the game relationship between integrated logistics service supplier and subcontract supplier is put forward, its upper-level objective function is to determine subcontract total cost which should be minimized, its lower-level objective function is subcontract supplier's total service quality which should be maximized. A criterion on measuring subcontract supplier's service quality was presented as "synthetically expressive degree(SED)".Then true influencing factors and their weights were gained by reducing all influencing factors based on fuzzy-rough set. According to true influencing factors' weights, we can calculate synthetically expressive degree of each subcontract supplier. A genetic algorithm to solve model was proposed, a rule of dealing with constraints and lower-level objective function were designed and applied to the genetic algorithm. Finally, a simple simulation application was illustrated; the result indicates the method is good at inspiriting subcontract supplier to cut down price and improved service quality at the same time.