Abstract
Integrated supplier selection and order allocation is an important decision for both designing and operating supply chains. This decision is often influenced by the concerned stakeholders, suppliers, plant operators and customers in different tiers. As firms continue to seek competitive advantage through supply chain design and operations they aim to create optimized supply chains. This calls for on one hand consideration of multiple conflicting criteria and on the other hand consideration of uncertainties of demand and supply. Although there are studies on supplier selection using advanced mathematical models to cover a stochastic approach, multiple criteria decision making techniques and multiple stakeholder requirements separately, according to authors׳ knowledge there is no work that integrates these three aspects in a common framework. This paper proposes an integrated method for dealing with such problems using a combined Analytic Hierarchy Process–Quality Function Deployment (AHP–QFD) and chance constrained optimization algorithm approach that selects appropriate suppliers and allocates orders optimally between them. The effectiveness of the proposed decision support system has been demonstrated through application and validation in the bioenergy industry.
Highlights
Supplier selection is a typical multi-criteria decision problem (Liao and Rittscher, 2007). Weber and Current (1993) describe the supplier selection problem as which supplier(s) should be selected and how much order quantity should be assigned to each
This study addresses the subset of supplier selection problems characterised as requiring multiple suppliers to allocate orders to multiple decision criteria and having multiple stakeholder groups to satisfy
This section describes the development of a decision support system that can integrate a stakeholder requirements method and a stochastic multi-criteria optimization method
Summary
Supplier selection is a typical multi-criteria decision problem (Liao and Rittscher, 2007). Weber and Current (1993) describe the supplier selection problem as which supplier(s) should be selected and how much order quantity should be assigned to each. Firms are involving stakeholder groups in their decision making including bringing stakeholder opinion into the design of new products and services early in the design process (Marsillac and Roh, 2014), especially with regards to environmental and sustainability performance (Aschehoug et al, 2012). This practice has made it into supply chain decision making as stakeholder influence has become recognised as important to supply chain performance (Polonsky and Ottman, 1998; Klassen and Vereecke, 2012; Miemczyk et al, 2012; Seuring and Gold, 2013). Given the complexity and length of some supply chains the stakeholders impacted by the supplier selection decision are complex and varied
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