An agent-based negotiation model for supplier selection of multiple products with synergy effect

Abstract

Supplier selection is an important problem in supply chain management (SCM), and has attracted the attention of many researchers. Tremendous effort has been spent on the development of agent-based systems to automate supplier selection negotiation process in SCM applications. In this kind of multi-agent system (MAS), software agents are established to represent various parties and functions involving in the supplier selection negotiation process. Most of current systems only deal with relatively simple negotiations involving the acquisition of one product, they are not sufficient to support complex negotiations involving multiple products with synergy effect. However, in practice, it is common for a purchasing company to procure multiple products simultaneously, and the synergy effects that exist between products could affect the final choice of cooperative suppliers. This paper presents an agent-based negotiation model to automate the supplier selection process involving a bundle of products with synergy effect. A MAS is established to realize the proposed negotiation model for multi-product supplier selection. Furthermore, the negotiation proposal, negotiation protocol, negotiation strategies, and decision making methods involving in the negotiation model are elaborated for the multi-product supplier selection environment. Through the proposed negotiation model, the purchasing company and suppliers can reach agreements on the details of products simultaneously and exploit the synergy effect between products. Finally, illustrative examples are conducted to demonstrate the function and effectiveness of the negotiation model for multi-product supplier selection.