Using a Product Life Cycle Cost Model to Solve Supplier Selection Problems in a Sustainable, Resilient Supply Chain

Yu-Jwo Tao,Chang-Shu Tu,Yi-Shyuan Lin,Guo-Ya Gan,Hsuan-Shih Lee

doi:10.3390/su14042423

Abstract

Supplier selection constitutes a crucial component of manufacturing procurement. We developed a product life cycle cost (PLCC) model to support Taiwanese light-emitting diode (LED) manufacturers in capacity planning for sustainable and resilient supply chain (SC) management. For firms, supply chain PLCC (SCPLCC) is a key consideration, but relevant evidence is scarce. We applied two types of goal programming, namely multiobjective linear programming and revised multichoice goal programming (RMCGP), to develop a PLCC-based model that minimizes net costs, rejections, and late deliveries. Moreover, we constructed a decision-making tool for application to a case of SC sustainable procurement management in a high-tech Taiwanese LED company. Managers can resolve relevant problems by employing the two approaches of the SCPLCC model with various parameters. The implementation of RMCGP with weighted linear goal programming sensitivity analysis produced sufficient findings, according to a study of five models for practical implications. The primary findings of the current model assist business decision-makers in minimizing PLCC, reducing PLCC cost, minimizing net cost, number of rejections, number of late deliveries, achieving PLCC goals, and selecting the best supplier in the context of sustainable SC development.

Highlights

Because of the globalization of commercial markets and improvements in information technology, a well-constructed supply chain management (SCM) system is an instrumental tool for gaining competitive advantage [1,2]
The results demonstrated that revised multichoice goal programming (RMCGP) with geometric mean weighting and penalty weighting was a suitable approach for solving the supply chain PLCC (SCPLCC) problem
The weighted max–min method developed by Lin [39] 44 yielded the same solution to the SCPLCC problem as did the RMCGP method involving geometric mean weighting and penalty weighting

Summary

Introduction

Because of the globalization of commercial markets and improvements in information technology, a well-constructed supply chain management (SCM) system is an instrumental tool for gaining competitive advantage [1,2]. In higher SC levels, supplier selection constitutes an integral component of manufacturing procurement and a pivotal industrial activity [3,4,5]. With the growing globalization of industry, SCM has become an increasingly multifaceted undertaking. SCs represent the pathway between suppliers and buyers, customers, or consumers [6]. The primary goal of a manufacturing company is to make the correct product in the correct amount for the correct customer in a timely manner. Purchasing companies demand advanced buyer interactions with their suppliers for a respectful relationship between the two parties

Methods

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Discussion

Conclusion