Integrated order acceptance and supply chain scheduling problem with supplier selection and due date assignment

Abstract The importance, benefits, and impact of integration of decisions within supply chains have long been investigated by many researchers. Order acceptance and supplier selection are two of the most critical decisions for supply chain managers. Throughout the process of order acceptance, a manufacturer has to decide which orders to be accepted and processed and based on the accepted orders, the volume of required raw material is determined. On the other hand, a manufacturer aims to choose one or several suppliers among all possible choices to provide sufficient raw material for the accepted orders, subject to different criteria such as list price, transportation cost, etc. This paper addresses an integrated framework for profit maximization in an integrated supplier selection, order acceptance and scheduling problem in a single-machine environment with multiple customers. There is substantial literature on the problems of supplier selection and order acceptance; however, to the best of our knowledge, this paper is the first research that integrates these essential decisions in the form of a mathematical model to maximize the total profit. The problem is NP-hard in nature; therefore, solving to optimality is not practically possible for problems with medium and large size. For that purpose, we developed a Heuristic Algorithm (HA) to solve the problem above in a reasonable time, with proper accuracy. Results from this heuristic algorithm are compared with that of a commercial solver (GAMS) and the well-known Genetic Algorithm (GA) and Variable Neighborhood Search (VNS). Computational experiments demonstrate that the developed heuristic algorithm is more efficient in comparison with other tested methods.