An integrated group decision-making process for supplier selection and order allocation using multi-attribute utility theory and linear programming

Abstract Supplier selection is a complex multi-criteria problem including both quantitative and qualitative factors. In order to select the best suppliers it is necessary to make a trade-off between these factors, some of which may be in conflict and may also be uncertain. In this problem if suppliers have capacity or other different constraints, two problems will exist: which suppliers are best and how much should be purchased from each selected supplier. In this paper an integrated approach of multi-attribute utility theory (MAUT) and linear programming (LP) is proposed for rating and choosing the best suppliers and defining the optimum order quantities among selected ones in order to maximize total additive utility. A numerical example is proposed to illustrate an application of the proposed method.

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