Vendor Selection Optimization In Supply Chain Management

Paper Topic :

Decision making

Author Name :

Neelam Vagal

Abstract :

An effective vendor selection process forms the backbone of success for any manufacturing organization. Simply looking for vendors offering the lowest prices is not efficient sourcing any more. We propose a multi-criteria decision making method, which accounts for both vendor selection and optimal order allocation. We also propose a policy for unselected vendors to maintain a competitive environment and derive maximum benefits for the buyer. The model ranks vendors on the basis of their efficiency scores, derived from data envelopment analysis (DEA). These scores are then utilized in forming policies to retain the interest of unselected vendors in the selection process. Integer programming model is used to select the vendors and allocate optimum order quantities to them based on their scores, while considering the buyer and vendor constraints.

Download Article