Abstract
In this paper, the authors proposed a multi-objective Mixed Integer Linear Programming (MILP) model for supplier selection problems. The main aim of the system under the investigation is to plan the companies to supply goods to achieve financial benefit by minimizing the total costs and satisfying the customers with on-time delivery and minimizing rejected items. In this case, some restrictions such as multi-product and multi-period conditions, shortage inventory constraints, and discount circumstances simultaneously are considered. Despite these efforts, due to the uncertainty nature of the problem, some parameters are considering as uncertainty data. For this aim, applying robust counterparts for uncertain parameters plays an essential role in real-world applications of this case. It is concluded that the feasibility and optimality properties of the usual solutions of real-world LPs can be severely affected by small changes of the data and that the robust optimization (RO) methodology can be successfully used to overcome this phenomenon.
Highlights
The reduction of production cost is one of the most essential critical for survival in the real world's competitive environment
Selecting the best suppliers as a particular part of a supply chain can effectively reduce the cost of purchasing and increase the competitiveness of the organizations and companies because, in most industries, the cost of raw materials of the product will contain most of the price of the product
The performance of the system can be improved by reducing costs by eliminating waste, continuous quality improvement to make zero defects rate, improving flexibility to satisfy the needs of final customers, reducing delays at various stages of the supply chain
Summary
The reduction of production cost is one of the most essential critical for survival in the real world's competitive environment. The authors present a MILP model for a supplier selection problem and they are going to use robust optimization in order to counter with the vagueness of the data of the problem. The structure of this paper is organized as follows: After introducing the problem and explaining some literature reviews, a multi-objective mixed-integer linear programming model for the supplier selection problem considering multi-product and multi-period conditions, shortage and inventory conditions, and considering discount circumstances is represented. Objectives in this problem are minimizing costs, minimizing rejected items, and maximizing on-time delivery.
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