Effects of direct and intermodal transport on supplier selection: a multiobjective approach

The impact of transportation on the supplier selection has received a very scant attention in the literature. It induces a great limitation because splitting orders across multiple suppliers will lead to smaller transportation quantities which will likely imply larger transportation cost. Moreover, transportation and inventory elements are highly interrelated and contribute most to the total logistics costs. In this paper, we present a nonlinear multiobjective programming approach of selecting suppliers and allocating the order quantity among them, taking transportation into account. . In our study, we consider the case where the product brought from selected suppliers can be shipped directly or via consolidation terminals to the buyer. Shipping via a terminal can incur an inventory holding cost. The model considers the total production cost and the lead-time as the criteria to minimize concurrently subject to suppliers and buyer constraints. The total cost is the sum of transportation, inventory and ordering costs. An evaluation of the model is presented under various scenarios.