An Approach for Supplier Selection in Supply Chain Management

Abstract

Supplier selection ans assigning manufacturers order quantities to suppliers are challenging issues in the supply chain management. Especially, when multi-tiers suppliers exist, the performance of supply chain is influenced by the 2nd and 3rd suppliers. Supplier selection is a multi-criteria problem which includes to make a trade off between these factors such as product quality, capacity, production cost, and delivery lead time of supplier constraints existing in the multi-tier's supplier purchasing chain. In these circumstances, purchasing agents should decide two problems: which is the best supplier in each tier and how much should be purchased from each selected supplier. This research is intended to develop an integration of an analytical hierarchy process(AHP) and mathematical formulation to consider factors which may be conflicted in choosing the best supplier in each tier and placing the optimum order quantities to the supplier among multi-tiers suppliers.