Optimal decision making on raw material supplier selection and production planning via multiobjective optimization model

Abstract

In this article, a mathematical model in the form of multiobjective linear programming was formulated for optimal decision making on raw material supplier selection problem and production planning problem with conditions of multi raw material, multi supplier and multi product. The corresponding multiobjective optimization problem was solved by finding the Pareto optimal solution using weighting method where all of the objective functions was converted into single objective optimization problem. The computation was performed by using linear programming solver (simplex algorithm) provided in LINGO® 17.0. A numerical experiment was performed to evaluate the model and to illustrate how the problem was solved. The result was shown that the optimal decision was determined i.e. the optimal supplier was selected, the volume of each raw material that should be purchased from the optimal supplier was determined and the optimal volume of each product that should be produced was obtained where these optimal decisions were minimized (in Pareto sense) the objective functions.