Providing a model for supplier selection and order allocation and developing of Three Dimensional Fordyce-Webster Algorithm with shortage (Case Study: a high-voltage switches company)

Raw materials supply costs form more than 60 percent of the price of a product in an organization. Therefore, the raw material supply planning has considerable effect in reducing the cost. Supplier management is one of the most important parts in supply chain management. Most of firms have been spending considerable amount of their revenues on purchasing. Hence supplier selection is one of the most important functions of purchasing management. The aim of this research is providing a linear integer mathematical model for supplier selection and order allocation with shortage and solving the model with three dimensional Fordyce–Webster Algorithm. In this research for the first time, maximum once period backorder cost is added to the three dimensional Fordyce–Webster Algorithm. In order to measuring performance of the proposed model, a high-voltage switches company's data and data from two other examples have been applied to the proposed model and the model has been studied in terms of " changing the ratio of holding cost and backorder cost" and " number of suppliers and number of time period". Finally, to solve the model, maximum once period backorder cost is added to the three dimensional Fordyce–Webster Algorithm.