Abstract
In this article, a supplier selection problem with price discount and probabilistic demand was solved by formulating a new probabilistic programming model with a piecewise objective function. The proposed model was able to be used by the decision-maker to calculate the optimal decision involving the appropriate raw material quantity to be ordered from each supplier to have minimal total procurement cost. A numerical experiment was conducted with some randomly generated data and the results showed the supplier selection problem was solved by the proposed model and the optimal decision value is achieved.
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