A two-stage fuzzy approach for supplier evaluation and order allocation problem with quantity discounts and lead time

Supplier selection is one of the major determinants of organizational competitiveness. The decisions on supplier selection are inherently complicated because of the necessity to consider simultaneously a variety of conflicting issues in a broad set of criteria from strategic to operational, and from quantitative to qualitative. In this study we developed a two-stage fuzzy approach to supplier selection and order allocation problem. In the first stage, fuzzy MULTIMOORA was utilized to evaluate and select suppliers with regard to subjective measures. Then, in the second stage fuzzy goal programming was used to determine the amount of order allocated to selected suppliers. The problem is formulated as a multi-product, multi-supplier problem having multiple objectives by satisfying quantity discounts, lead time, capacity and demand constraints. We used augmented max-min model guaranteeing non-dominated solutions, to transform the fuzzy multiobjective model into a crisp single objective function model. The results of each stage were compared with those obtained from other alternative techniques. The study also covers a real life problem to test the applicability and feasibility of the approach.