A New Multiple Objective Integer Linear Programming Methodology for Vendor Selection and Supply Quotas Determination Problem

In this paper a new methodology for vendor selection and supply quotas determination is proposed. The proposed methodology is contained of four phases: (1) Determination of criteria for vendor selection, (2) Application of AHP method to determine the objective function coefficients, (3) Forming multi objective integer linear programming (MOILP) model, and (4) Application the new multi objective integer linear programming method based on cooperative game theory in the MOILP model solving. The proposed methodology is tested on the example of flour purchase by a company that manufactures bakery products. The criteria used for vendor selection and quantities supplied by individual vendors are: (1) Purchasing costs, (2) Product quality, and (3) Vendor reliability.