Presenting and solving a bi-objective planning model for supplier selection with considering discount and inventory shortage

Supplier selection is the process by which firms identify, evaluate, and contract with suppliers. The supplier selection process deploys a tremendous amount of a firm's financial resources. Nowadays, supplying the required resource of organizations has become an important business approach so a competitive advantage may be gained by the selection of the best suppliers to provide products/services more effectively and efficiently. Many models have been developed for solving supplier selection problem. In this paper, in addition to considering the incremental discount strategies, cost of shortages is also considered so far has not been considered. In this model, two objective functions of cost minimization of the buyer, and maximize quality of product is considered. To solve the proposed supplier selection model, an improved harmony search algorithm is used. The results show that the proposed algorithm works properly in the term of both CPU time and the quality of solutions. Finally, some numerical examples for model analyses are presented.