Abstract
Purpose: This paper is an attempt to establish the mathematical programming model of the vendor selection for the joint procurement from a total cost of ownership perspective. Design/methodology/approach: Fuzzy genetic algorithm is employed to solve the model, and the data set of the ball bearings purchasing problem is illustrated as a numerical analysis. Findings: According to the results, it can be seen that the performance of the optimization model is pretty good and can reduce the total costs of the procurement. Originality/value: The contribution of this paper is threefold. First, a literature review and classification of the published vendor selection models is shown in this paper. Second, a mathematical programming model of the vendor selection for the joint procurement from a total cost of ownership perspective is established. Third, an empirical study is displayed to illustrate the application of the proposed model to evaluate and identify the best vendors for ball bearing procurement, and the results show that it could reduce the total costs as much as twenty percent after the optimization.
Highlights
Vendor/supplier selection is one of the most important activities of acquisition since the results have a great impact on the quality of goods and performance of the supply chains (Chen, Lin & Huang, 2006; Castro, Gómez & Franco, 2009; Thrulogachantar & Zailani, 2011)
Most of the current literature focused on the vendor selection from one factory, there has been limited research focused on the vendor selection for the joint procurement from more than one factory belong to one enterprise group from a total cost of ownership perspective, which is the primary motivation of this research
This study is focused on establishing the mathematical programming model of the vendor selection for the joint procurement from more than one factory belong to one enterprise group from a total cost of ownership perspective, which is an improved model of vendor selection for the joint procurement from one factory
Summary
Vendor/supplier selection is one of the most important activities of acquisition since the results have a great impact on the quality of goods and performance of the supply chains (Chen, Lin & Huang, 2006; Castro, Gómez & Franco, 2009; Thrulogachantar & Zailani, 2011). With the rapidly development of M corporation, the demand of the ball bearing is increasing, so M corporation needs to purchase more than ten million ton ball bearing from the suppliers. This corporation asks the subsidiary companies to reduce the costs in order to be competitive, while as one of the major materials, the total costs of the ball bearing procurement has a large proportion of the operations costs, which makes the M corporation to reduce the total costs of the ball bearing through optimization the vendor selection and the purchasing plan
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