Multi-objective simulation optimization for selection and determination of order quantity in supplier selection problem under uncertainty and quality criteria

Abstract

Simulation optimization is providing solutions to practical stochastic problems. Supplier selection is one of the most important decisions that determine the survival of an organization. In this paper, a novel multi-objective simulation optimization method to make decisions on selecting the suppliers and determining the order quantities is proposed. Regarding the fact that a real supply chain is multi-objective with uncertain parameters and includes both quantitative and qualitative variables, the proposed method considers these points and is applicable to real-world problems. This method also considers supplier selection and order quantity allocation to each supplier, which are totally related, as an integrated model. The proposed method consists of four basic modules: Cuckoo Optimization Algorithm (COA), Discrete Event Simulation (DES), Supply Chain Model (SCM), and Generalized Data Envelopment Analysis (GDEA). Unlike many multi-objective methods, the proposed method is not limited to the number of objective functions and this is one of its main benefits. It also pays attention to the efficiency of the organization and, at the same time, finding inputs which result in best output amounts. This method, in addition to the convergence criterion, pays special attention to the dispersion of the Pareto frontier as the second criterion for choosing the good solutions. For implementation of the proposed method, the numerical results for the problem of supplier selection in multi-product, multi-customer modes, and uncertain and qualitative variables are discussed and the Pareto frontiers are presented. The proposed method in this paper is compared with a similar method, and the results show the efficiency of the proposed method.