Multi objective sourcing strategy design with order allocation model

Abstract

In recent years, supply chains have become increasingly globalized. A firm's operations strategy and financial prosperity rely on its sourcing strategy and, thus, decisions regarding sourcing strategy are fundamental to successful supply chain management. In this study, a hybrid model is proposed to determine the supply chain sourcing strategy and order quantities. The first model evaluates sourcing alternatives via fuzzy logic method and the second model determines the optimal order quantities among sourcing alternatives with multi objective mixed integer linear programming model (MO-MIP). The objectives of the MO-MIP are maximization of alternative sourcing strategies benefits and minimization of total cost. The numerical examples of the proposed hybrid model are presented in the study. The results show that the proposed hybrid model is an efficient tool to evaluate sourcing strategies and determine order quantities among alternatives.