Credibility-Based Biobjective Fuzzy Optimization for Supplier Selection Problem with Disruption

Xuejie Bai

doi:10.1155/2015/256428

Abstract

This paper addresses a supplier selection problem in which a buyer procures multiple products from multiple suppliers under disruption risk. The problem is formulated as a new credibility-based biobjective fuzzy optimization model. In the proposed model, cost, capacity, and demand are characterized by fuzzy variables with known possibility distributions. The objectives of our model are to maximize the total quality of purchased products and minimize the expected total cost. Two credibility constraints are used to guarantee that the chance about the supplier capacity and buyer demand can satisfy the predetermined levels. The main concern in solving the optimization model is to calculate the expected value of the objective function and the credibility in the constraints. When the key parameters are mutually independent triangular fuzzy variables, the expected cost objective and credibility constraints can be transformed into their equivalent forms. Taking advantage of the structural characteristics of the equivalent model, the goal programming method is employed to solve the supplier selection model, which can be solved by conventional optimization method. At last, some numerical experiments have been performed to illustrate the effectiveness of the proposed model and solution strategy.

Highlights

Supplier selection is an important component of supply chain management and receives a great deal of attention with the development of economic globalization and competitive pressure
Multiple goals with appropriate priority structure must be taken into consideration, so it is the best choice to employ the goal programming method to convert a multiobjective optimization model into a single objective one
The goal programming method was introduced by Charnes et al [24], extensively discussed by Charnes and Cooper [25], and further refined by the work of Ijiri [26] and Lee [27]

Summary

Introduction

Supplier selection is an important component of supply chain management and receives a great deal of attention with the development of economic globalization and competitive pressure. Due to the presence of outside suppliers, supply chains are subject to two sources of risk, routine operational problems and major disruptions [1]. Disruptive events mainly include both natural disasters and man-made disasters, which have caused disastrous damage to various firms or companies in different supply chains. Supplier selection with disruption refers to the fact that suppliers are assigned sequentially so that the buyer may already have one backup when its primary supplier suffers a default due to disruptive risks. The purpose of this paper is to formulate a credibilitybased biobjective optimization model to mitigate disruption risks while addressing concurrently operational risks as well. According to the computational results, the decision maker can obtain a supplier-level-order assignment plan that is used for routine operation and a mitigation scheme that would be prepared when a disruption event occurs

Methods

Results

Conclusion