Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
10347443 | Computers & Operations Research | 2013 | 8 Pages |
Abstract
In this paper, we study the supplier selection and procurement decision problem with uncertain demand, quantity discounts and fixed selection costs. In addition, a holding cost is incurred for the excess inventory if the buyer orders more than the realized demand and the shortage must be satisfied by an emergent purchase at a higher price otherwise. The objective is to select the suppliers and to allocate the ordering quantity among them to minimize the total cost (including selecting, procurement, holding and shortage costs, etc.). The problem is modeled as a Mixed Integer Programming (MIP) and is shown to be NP-hard. Some properties of the optimal policy are provided and an optimal algorithm is proposed based on the generalized Bender's decomposition. Numerical experiments are conducted to show the efficiency of the algorithm and to obtain some managerial insights.
Related Topics
Physical Sciences and Engineering
Computer Science
Computer Science (General)
Authors
Ju-liang Zhang, Jian Chen,