<abstract xmlns="http://www.w3.org/1999/xhtml"><bold>Background:</bold> Vendor selection and supply quotas determination is one of the most important issues in the purchasing process in manufacturing. In many situations to solve this problem it is necessary to use the operations research methods.<bold>Objectives:</bold> This paper proposes a new methodology for vendor selection and determination of supplied quotas. The work investigates the problem of flour purchase by a company that manufactures bakery products.<bold>Methods/Approach:</bold> The problem is solved by using the model that combines a revised weighting method, and a multiple objective programming method based on game theory. The revised weighting method is used to determine the objective function coefficients, and a multiple objective programming method is used to select vendors and to determine supply quotas from the selected vendors. For selection of vendors and determination of quantities supplied by individual vendors three complex criteria are used: (1) purchasing costs, (2) product quality, and (3) vendor reliability.<bold>Results:</bold> The proposed methodology has numerous strengths, such as an efficient reduction of complex criteria functions to simple ones and efficient using of a new multiple objective programming methods based on cooperative game theory.<bold>Conclusions:</bold> The main advantage of the proposed approach is its efficiency and simplicity.</abstract>

Background: Vendor selection and supply quotas determination is one of the most important issues in the purchasing process in manufacturing. In many situations to solve this problem it is necessary to use the operations research methods.Objectives: This paper proposes a new methodology for vendor selection and determination of supplied quotas. The work investigates the problem of flour purchase by a company that manufactures bakery products.Methods/Approach: The problem is solved by using the model that combines a revised weighting method, and a multiple objective programming method based on game theory. The revised weighting method is used to determine the objective function coefficients, and a multiple objective programming method is used to select vendors and to determine supply quotas from the selected vendors. For selection of vendors and determination of quantities supplied by individual vendors three complex criteria are used: (1) purchasing costs, (2) product quality, and (3) vendor reliability.Results: The proposed methodology has numerous strengths, such as an efficient reduction of complex criteria functions to simple ones and efficient using of a new multiple objective programming methods based on cooperative game theory.Conclusions: The main advantage of the proposed approach is its efficiency and simplicity.

Vendor Selection and Supply Quotas Determination by Using a New Multi-Objective Programming Method Based on Cooperative Game Theory

Faculty of Economics and Business Zagreb, University of Zagreb, Croatia

Business Systems Research Journal

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Background: Vendor selection and supply quotas determination is one of the most important issues in the purchasing process in manufacturing. In many situations...

Vendor Selection and Supply Quotas Determination by Using a New Multi-Objective Programming Method Based on Cooperative Game Theory

Published Online: May 28, 2016

Page range: 104 - 118

Received: Aug 18, 2015

Accepted: Feb 15, 2016

DOI: https://doi.org/10.1515/bsrj-2016-0008

Keywords
cooperative game theory, multiple objective programming, revised weighting method, vendor selection

© 2016 Tunjo Perić, published by De Gruyter Open

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Vendor Selection and Supply Quotas Determination by Using a New Multi-Objective Programming Method Based on Cooperative Game Theory

Published Online: May 28, 2016

Page range: 104 - 118

Received: Aug 18, 2015

Accepted: Feb 15, 2016

DOI: https://doi.org/10.1515/bsrj-2016-0008

Keywordscooperative game theory, multiple objective programming, revised weighting method, vendor selection

© 2016 Tunjo Perić, published by De Gruyter Open

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
cooperative game theory, multiple objective programming, revised weighting method, vendor selection