Evaluation and Selection of Suppliers with Quantity Discounts(Case Study: Isfahan’s Mobarakeh Steel Company)

One of the important issues in supply chain management is the evaluation and selection of efficient suppliers, which leads to the creation of competitive advantage and improving the performance of the organization. This becomes more important when several suppliers with the possibility of discount are also considered. The purpose of the present research is to evaluate and select of suppliers in multiple conditions (multi-product/ multi-supplier) whit quantity discounts in Isfahan’s Mobarakeh Steel Company. This research is applied and due to it's nature and method is descriptive-survey. To solving the supplier selection problem, a hybrid method including a Fuzzy Analytical Hierarchy Process (FAHP) and a mathematical model with Mixed Integer Linear Programming (MILP) method has been developed. This method operates in two stages. In the first stage, the relative weights of each criterion for each type of item are determined via FAHP technique. In the second stage, the outputs of the first stage are used as inputs in the MILP model to determine the suppliers and the quantities to be provided. The proposed model has been implemented in the purchase department of Isfahan’s Mobarakeh Steel Company and selection problem of best supplier from among the four companies, to purchase four products and regarding four criteria's investigated. The results indicate that applying the proposed model enables decision makers not only to improve their decisions by integrating quantitative and non-quantitative criteria, but to do it systematically and with a higher level of confidence.