Supplier Selection And Order Allocation Problem Of Vegetexco Company Considering Multiple Transportation Alternatives

Abstract

Supplier selection and order allocation problems have always been the concerns of many organizations as they are crucial in optimizing the efficiency of the procurement policy. Previous studies have yet to thoroughly consider two aspects: (1) multiple transportation alternatives (TAs) are used when goods are transported from a supplier to a receiver; (2) a finite planning horizon consisting of multiple discrete time periods. This paper presents a structured framework that includes two separated phases. In the first phase- selection, a Data Envelopment Analysis (DEA) model is constructed to calculate the relative efficiency of the suppliers and the TAs. In second phase-allocation, a Multi-objective mixed integer programming model is applied to solve two objectives: minimizing the total costs and maximizing the overall efficiencies. This framework aims to answer 3 questions: What order quantity should be allocated to each supplier? Which TAs should be assigned to each supplier? In which period of the planning horizon should the order be placed? Finally, it uses a practical case of VEGETEXCO Company to demonstrate the applicability of the proposed framework. The result proposes an appropriate supplier evaluation and purchasing plan that might potentially reduce unnecessary costs and enhance the overall supply chain efficiency. Keywords: Supplier selection; Transportation alternative; Order allocation; Data envelopment analysis