Robust supplier selection in a closed loop supply chain using a hybrid approach based on design of experiments and simulation

Abstract

Supplier evaluation and selection is a vital problem in supply chain management of which the two most important factors are procurement cost and products quality level. Researchers have investigated many aspects of this problem so far. These factors, as delivery time and customer behaviour against product quality, are uncertain. Nevertheless, for the purpose of simple application, they are usually considered deterministic. To have more accurate modelling of the real world, it is necessary to consider these uncertain factors in models. Making sure that chain profit and product quality satisfy the decision maker, this paper develops a robust approach based on design of experiments and simulation for selection of suppliers in a closed loop supply chain, product quality. By implementing signal-to-noise ratio, variances of cost and product quality, as secondary objectives in optimisation process, are minimised to reduce the effect of noise factors on the objective functions under consideration.