Modeling of Multi-Objective Supplier Selection Problem by Simultaneously Considering Buyer - Supplier's Profit

Nowadays considering suppliers benefits in the supply chain management strategies is one of the critical success factors for forming a long time and strategic relationship with suppliers. It is known as a "win-win strategy" that can be formulated by supply chain coordination models. Because of a leading role for suppliers in developing new products and improving current products, they are being active participants in organizations. So it is necessary to consider suppliers’ benefits in purchasing decisions. By generalizing this concept to supplier selection problem, it is needed to consider whole supply chain benefits consist of suppliers and buyer benefits. In this paper, a multi-objective model, including cost, quality and delivery objectives, is proposed to coordinate between buyer and suppliers in supplier selection problem. Maximizing the number of received perfect products is the quality objective and minimizing the number of delays is delivery objective. The total cost of supply chain consist of buyer and suppliers costs, includes the costs of ordering, purchasing, inventory holding and compensation for delays and defects in products. The proposed mathematical model is formulated as a mixed integer nonlinear problem and its efficient solutions are obtained by using a heuristic algorithm. The results are showed in a supplier selection problem using a coordinated model has more benefits for supply chain than usual models.