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

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 c...

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Bibliographic Details
Published in:Journal of the Franklin Institute 2008-10, Vol.345 (7), p.731-747
Main Authors: Sanayei, Amir, Farid Mousavi, S., Abdi, M.R., Mohaghar, Ali
Format: Article
Language:English
Subjects:
Applied sciences
Decision theory. Utility theory
Exact sciences and technology
Mathematical programming
MAUT
Operational research and scientific management
Operational research. Management science
Supplier selection
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Summary: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.
ISSN:0016-0032
1879-2693
DOI:10.1016/j.jfranklin.2008.03.005