Title

Modeling synergies in multi-criteria supplier selection and order allocation: An application to commodity trading

Document Type

Article

Publication Date

4-19-2016

DOI

https://doi.org/10.1016/j.ejor.2016.04.015

Abstract

We propose a novel meta-approach to support collaborative multi-objective supplier selection and order allocation (SSOA) decisions by integrating multi-criteria decision analysis and linear programming (LP). The proposed model accounts for suppliers’ performance synergy effects within a hierarchical decision structure. It incorporates both heterogeneous objective data and subjective judgments of the decision makers (DMs) representing various groups with different voting powers (VPs). We maximize the total value of purchasing (TVP) by optimizing order quantity assignment to suppliers and taking into consideration their synergies encountered in different time horizons. We apply the proposed model to a contractor selection and order quantity assignment problem in an agricultural commodity trading (ACT) company. We maximize the strategic effectiveness of both the customers and the suppliers, minimize risks, increase the degree of cooperation between trading partners on all levels of supply chain integration, enhance transparent knowledge sharing and aggregation, and support collaborative decision making.

Language

English

Comments

Sodenkamp, M.A., Tavana, M. and Di Caprio, D. (2016) ‘Modeling Synergies in Multi-Criteria Supplier Selection and Order Allocation: An Application to Commodity Trading,’ European Journal of Operational Research, Vol. 254, No. 3, pp. 859-874.

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