Solving multi-objective supplier selection model using a compensatory approach

Abstract

Supply chain management (SCM) is one of the most important competitive strategies employed by the modern enterprises. The main aim of SCM is to integrate different suppliers to gratify market demand. Meanwhile, supplier selection and evaluation play an important role in establishing an efficient supply chain. Supplier selection as an essential component of SCM is usually a multi-criteria decision problem in which actual business contexts may be solved in the absence of precise information. Three objective functions are minimization of costs, maximization of presented units as well as maximization of on time delivery, respectively. In order to solve the problem, a compensatory fuzzy model was proposed to satisfy the decision-maker’s aspirations for fuzzy goals. The proposed approach could be efficiently applied to obtain non-dominated solutions. A numerical example was given to demonstrate how the approach was employed. So, for solving the problem, Lingo software was used.