Supplier selection and order allocation decisions under quantity discount and fast service options

Abstract In this study, we first discuss the characteristics of an effective supplier selection approach. Then, we compare the use of Multi-Criteria Decision Making (MCDM) techniques and mathematical models in terms of those characteristics. It is observed that neither of these approaches provides a framework that encompasses all the necessary characteristics. For this reason, a hybrid approach based on fuzzy TOPSIS, trapezoidal type-2 fuzzy AHP and goal programming is developed. Our approach simultaneously considers both qualitative and quantitative criteria, takes case-specific requirements such as capacity constraints, lot size constraints and quantity discounts into account and in the end, it does not only determine the appropriate supplier(s) to work with but also makes the order allocation. We conclude the study by presenting a real life problem and discussing the obtained results. Computational results show that our approach is able to find a tradeoff between conflicting criteria and makes an order allocation that satisfies all the constraints

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