Title: An effective method to supplier selection and order quantity allocation

Authors: Abraham Mendoza, Jose A. Ventura

Addresses: Harold and Inge Marcus Department of Industrial and Manufacturing Engineering, The Pennsylvania State University, 310 Leonhard Building, University Park, PA 16801, USA. ' Harold and Inge Marcus Department of Industrial and Manufacturing Engineering, The Pennsylvania State University, 310 Leonhard Building, University Park, PA 16801, USA

Abstract: For those companies where the number of potential suppliers is large, the procurement decision process becomes increasingly complicated. In response to this, we present a two-phase method that effectively integrates supplier selection and order quantity allocation. Firstly, a list of potential suppliers is ranked and reduced (prescreening phase) to a manageable number by applying the Analytic Hierarchy Process (AHP). Then, based on the reduced list of suppliers, a mathematical model is used to properly allocate order quantities (order quantity allocation phase) while minimising the ordering, holding and purchasing costs per time unit subject to suppliers| capacity and quality constraints.

Keywords: supply chain management; SCM; supplier selection; order quantity allocation; analytical hierarchy process; AHP; supplier capacity; quality constraints.

DOI: 10.1504/IJBSR.2008.018117

International Journal of Business and Systems Research, 2008 Vol.2 No.1, pp.1 - 15

Published online: 02 May 2008 *

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