An optimization model for supplier selection problem of a television manufacturing company

In any organisation, for an effective supply chain management, the purchasing function is very essential to perform effectively. The most important responsibility of purchasing function is to select suppliers to purchase the required materials. Supplier selection is a multi criteria decision making process that deals with the optimization of conflicting objectives such as quality, delivery time, and cost. The objective of supplier selection problem is to select suppliers with the highest potential to meeting an enterprises needs consistently at an acceptable cost. The aim of this study is to solve the supplier selection and order allocation problem of a television manufacturing company. This problem is multi objective decision making problem which is a kind of multi-item multiple sourcing one. Analytical Hierarchy Process and Weighted Goal Programming are used an integrated fashion to handle the problem. The four alternative models are developed to determine best suppliers for each item and also simultaneously allocate purchase orders among them by minimizing deviations from defined performance targets. Alternative models are solved by Lingo software. And the solutions are compared. Keywords: Supply Chain Management, Supplier Selection, Analytical Hierarchy Process, Goal Programming