Designing a Fuzzy Non-Linear Model of Supplier Selection in Case of Multiple Sourcing

Increasing global competition from one hand and customer’s diverse demand in today’s bussiness environement as well have caused the costs increase rapidly and profitability decrease as a result. Selecting the right suppliers can significantly reduce the purchasing cost and increase organization competitiveness. That’s why in most industries the cost of raw material and component part includes the main cost of a product. In the present study, Sintering Plant of Isfahan Steel Company was selected to be investigated. The inventories of this plant were categorized using the concepts of the VED and ABC methods. Two kinds of raw materials were found as the most important ones. The model of the supply of these materials with optimal consumption composite and the total cost of logistics, properties of suppliers and the buyer company was designed as a model of Mixed–Integer Fuzzy Non-Linear Programming type. Then the parameters of model using the company’s data within three previous years were computed. The performance of this model was examined using data of two consecutive years and the findings show 9/57 % and 6.49% cost reduction for two years, respectively.