IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v121y2009i2p482-493.html
   My bibliography  Save this article

Optimizing whole supply chain benefit versus buyer's benefit through supplier selection

Author

Listed:
  • Gheidar Kheljani, J.
  • Ghodsypour, S.H.
  • O'Brien, C.

Abstract

A number of mathematical models have been developed for modeling the supplier selection problem. Most of these models have considered the buyer's viewpoint and maximized only the buyer's benefit. This does not necessarily lead to an optimal situation for all members of a supply chain. Co-ordination models have been presented to optimize the benefits of all the members and alignment of decisions between entities of a supply chain. In this paper, the issue of coordination between one buyer and multiple potential suppliers in the supplier selection process has been considered. On the other hand, in the objective function of the model, the total cost of the supply chain is minimized rather than only the buyer's cost. The total cost of the supply chain includes the buyer's cost and suppliers' costs. The model has been solved by applying mixed-integer nonlinear programming. Finally, the proposed method is illustrated by a numerical example.

Suggested Citation

  • Gheidar Kheljani, J. & Ghodsypour, S.H. & O'Brien, C., 2009. "Optimizing whole supply chain benefit versus buyer's benefit through supplier selection," International Journal of Production Economics, Elsevier, vol. 121(2), pages 482-493, October.
    • Handle: RePEc:eee:proeco:v:121:y:2009:i:2:p:482-493
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925-5273(07)00179-X
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Lu, Lu, 1995. "A one-vendor multi-buyer integrated inventory model," European Journal of Operational Research, Elsevier, vol. 81(2), pages 312-323, March.
    2. Hoque, M. A. & Goyal, S. K., 2000. "An optimal policy for a single-vendor single-buyer integrated production-inventory system with capacity constraint of the transport equipment," International Journal of Production Economics, Elsevier, vol. 65(3), pages 305-315, May.
    3. Ghodsypour, S. H. & O'Brien, C., 1998. "A decision support system for supplier selection using an integrated analytic hierarchy process and linear programming," International Journal of Production Economics, Elsevier, vol. 56(1), pages 199-212, September.
    4. Weber, Charles A. & Current, John R. & Benton, W. C., 1991. "Vendor selection criteria and methods," European Journal of Operational Research, Elsevier, vol. 50(1), pages 2-18, January.
    5. Bylka, Stanislaw, 2003. "Competitive and cooperative policies for the vendor-buyer system," International Journal of Production Economics, Elsevier, vol. 81(1), pages 533-544, January.
    6. Li, Jianli & Liu, Liwen, 2006. "Supply chain coordination with quantity discount policy," International Journal of Production Economics, Elsevier, vol. 101(1), pages 89-98, May.
    7. James P. Monahan, 1984. "A Quantity Discount Pricing Model to Increase Vendor Profits," Management Science, INFORMS, vol. 30(6), pages 720-726, June.
    8. Chen, Chen-Tung & Lin, Ching-Torng & Huang, Sue-Fn, 2006. "A fuzzy approach for supplier evaluation and selection in supply chain management," International Journal of Production Economics, Elsevier, vol. 102(2), pages 289-301, August.
    9. Goyal, S.K., 2007. "A factual comment on "Joint economic lot size in distribution system with multiple shipment policy"," International Journal of Production Economics, Elsevier, vol. 105(2), pages 609-609, February.
    10. Thomas, Douglas J. & Griffin, Paul M., 1996. "Coordinated supply chain management," European Journal of Operational Research, Elsevier, vol. 94(1), pages 1-15, October.
    11. Kai-Leung Yung & Jiafu Tang & Andrew W. H. Ip & Dingwei Wang, 2006. "Heuristics for Joint Decisions in Production, Transportation, and Order Quantity," Transportation Science, INFORMS, vol. 40(1), pages 99-116, February.
    12. Apichai Ritvirool & William G. Ferrell Jr., 2007. "The effect on inventory of cooperation in single-vendor, single-buyer systems with quality considerations," International Journal of Operational Research, Inderscience Enterprises Ltd, vol. 2(3), pages 338-356.
    13. Abel P. Jeuland & Steven M. Shugan, 1983. "Managing Channel Profits," Marketing Science, INFORMS, vol. 2(3), pages 239-272.
    14. Kim, Taebok & Hong, Yushin & Chang, Soo Young, 2006. "Joint economic procurement--production-delivery policy for multiple items in a single-manufacturer, multiple-retailer system," International Journal of Production Economics, Elsevier, vol. 103(1), pages 199-208, September.
    15. Cakravastia, Andi & Toha, Isa S. & Nakamura, Nobuto, 2002. "A two-stage model for the design of supply chain networks," International Journal of Production Economics, Elsevier, vol. 80(3), pages 231-248, December.
    16. Viswanathan, S. & Piplani, Rajesh, 2001. "Coordinating supply chain inventories through common replenishment epochs," European Journal of Operational Research, Elsevier, vol. 129(2), pages 277-286, March.
    17. Talluri, Srinivas & Baker, R. C. & Sarkis, Joseph, 1999. "A framework for designing efficient value chain networks," International Journal of Production Economics, Elsevier, vol. 62(1-2), pages 133-144, May.
    18. Li, Xiuhui & Wang, Qinan, 2007. "Coordination mechanisms of supply chain systems," European Journal of Operational Research, Elsevier, vol. 179(1), pages 1-16, May.
    19. Maqbool Dada & K. N. Srikanth, 1987. "Pricing Policies for Quantity Discounts," Management Science, INFORMS, vol. 33(10), pages 1247-1252, October.
    20. Weber, Charles A. & Current, John R., 1993. "A multiobjective approach to vendor selection," European Journal of Operational Research, Elsevier, vol. 68(2), pages 173-184, July.
    21. Paul S. Bender & Richard W. Brown & Michael H. Isaac & Jeremy F. Shapiro, 1985. "Improving Purchasing Productivity at IBM with a Normative Decision Support System," Interfaces, INFORMS, vol. 15(3), pages 106-115, June.
    22. Goyal, Suresh K. & Nebebe, Fassil, 2000. "Determination of economic production-shipment policy for a single-vendor-single-buyer system," European Journal of Operational Research, Elsevier, vol. 121(1), pages 175-178, February.
    23. Ghodsypour, S. H. & O'Brien, C., 2001. "The total cost of logistics in supplier selection, under conditions of multiple sourcing, multiple criteria and capacity constraint," International Journal of Production Economics, Elsevier, vol. 73(1), pages 15-27, August.
    24. J A A van der Veen & V Venugopal, 2005. "Using revenue sharing to create win–win in the video rental supply chain," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 56(7), pages 757-762, July.
    25. Hill, Roger M., 1997. "The single-vendor single-buyer integrated production-inventory model with a generalised policy," European Journal of Operational Research, Elsevier, vol. 97(3), pages 493-499, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yang, Hui & Chen, Jing & Chen, Xu & Chen, Bintong, 2017. "The impact of customer returns in a supply chain with a common retailer," European Journal of Operational Research, Elsevier, vol. 256(1), pages 139-150.
    2. Ventura, José A. & Bunn, Kevin A. & Venegas, Bárbara B. & Duan, Lisha, 2021. "A coordination mechanism for supplier selection and order quantity allocation with price-sensitive demand and finite production rates," International Journal of Production Economics, Elsevier, vol. 233(C).
    3. Kumar, V.N.S.A. & Kumar, V. & Brady, M. & Garza-Reyes, Jose Arturo & Simpson, M., 2017. "Resolving forward-reverse logistics multi-period model using evolutionary algorithms," International Journal of Production Economics, Elsevier, vol. 183(PB), pages 458-469.
    4. Pun, Hubert, 2014. "Supplier selection of a critical component when the production process can be improved," International Journal of Production Economics, Elsevier, vol. 154(C), pages 127-135.
    5. Asian, Sobhan & Hafezalkotob, Ashkan & John, Jubin Jacob, 2019. "Sharing economy in organic food supply chains: A pathway to sustainable development," International Journal of Production Economics, Elsevier, vol. 218(C), pages 322-338.
    6. Mohammaditabar, Davood & Ghodsypour, Seyed Hassan & Hafezalkotob, Ashkan, 2016. "A game theoretic analysis in capacity-constrained supplier-selection and cooperation by considering the total supply chain inventory costs," International Journal of Production Economics, Elsevier, vol. 181(PA), pages 87-97.
    7. Zhang, Yan & Xia, Guoping, 2010. "Short-run cost-based pricing model for a supply chain network," International Journal of Production Economics, Elsevier, vol. 128(1), pages 167-174, November.
    8. Yu, Yugang & Hong, Zhaofu & Zhang, Linda L. & Liang, Liang & Chu, Chengbin, 2013. "Optimal selection of retailers for a manufacturing vendor in a vendor managed inventory system," European Journal of Operational Research, Elsevier, vol. 225(2), pages 273-284.
    9. Imre Dobos & Gyöngyi Vörösmarty, 2021. "Green supplier selection using a common weights analysis of DEA and EOQ types of order allocation," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(3), pages 612-621, April.
    10. Shaikha Al-Nuaimi & Abdul-Aziz A. Banawi & Sami G. Al-Ghamdi, 2019. "Environmental and Economic Life Cycle Analysis of Primary Construction Materials Sourcing under Geopolitical Uncertainties: A Case Study of Qatar," Sustainability, MDPI, vol. 11(21), pages 1-26, October.
    11. Noori-Daryan, Mahsa & Taleizadeh, Ata Allah & Jolai, Fariborz, 2019. "Analyzing pricing, promised delivery lead time, supplier-selection, and ordering decisions of a multi-national supply chain under uncertain environment," International Journal of Production Economics, Elsevier, vol. 209(C), pages 236-248.
    12. Kannan Govindan & R. Sivakumar, 2016. "Green supplier selection and order allocation in a low-carbon paper industry: integrated multi-criteria heterogeneous decision-making and multi-objective linear programming approaches," Annals of Operations Research, Springer, vol. 238(1), pages 243-276, March.
    13. Kannan Govindan & R. Sivakumar, 2016. "Green supplier selection and order allocation in a low-carbon paper industry: integrated multi-criteria heterogeneous decision-making and multi-objective linear programming approaches," Annals of Operations Research, Springer, vol. 238(1), pages 243-276, March.
    14. Jeong, Yoonjea & Saha, Subrata & Chatterjee, Debajyoti & Moon, Ilkyeong, 2018. "Direct shipping service routes with an empty container management strategy," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 118(C), pages 123-142.
    15. Xu, Jiuping & Ding, Can, 2011. "A class of chance constrained multiobjective linear programming with birandom coefficients and its application to vendors selection," International Journal of Production Economics, Elsevier, vol. 131(2), pages 709-720, June.
    16. Turan Paksoy & Eren Özceylan & Gerhard-Wilhelm Weber, 2013. "Profit oriented supply chain network optimization," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 21(2), pages 455-478, March.
    17. Luminiţa Nicolescu & Cristina Galalae & Alexandru Voicu, 2013. "Solving a Supply Chain Management Problem to Near Optimality Using Ant Colony Optimization, in an International Context," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 15(33), pages 8-26, February.
    18. Qingsheng Zhu & Kai Gao & Jia-Bao Liu, 2023. "Cloud model for new energy vehicle supply chain management based on growth expectation," Journal of Combinatorial Optimization, Springer, vol. 45(5), pages 1-23, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sarmah, S.P. & Acharya, D. & Goyal, S.K., 2006. "Buyer vendor coordination models in supply chain management," European Journal of Operational Research, Elsevier, vol. 175(1), pages 1-15, November.
    2. Ben-Daya, M. & Darwish, M. & Ertogral, K., 2008. "The joint economic lot sizing problem: Review and extensions," European Journal of Operational Research, Elsevier, vol. 185(2), pages 726-742, March.
    3. Ventura, José A. & Bunn, Kevin A. & Venegas, Bárbara B. & Duan, Lisha, 2021. "A coordination mechanism for supplier selection and order quantity allocation with price-sensitive demand and finite production rates," International Journal of Production Economics, Elsevier, vol. 233(C).
    4. Jiafu Tang & Kai-Leung Yung & Iko Kaku & Jianbo Yang, 2008. "The scheduling of deliveries in a production-distribution system with multiple buyers," Annals of Operations Research, Springer, vol. 161(1), pages 5-23, July.
    5. Zavanella, Lucio & Zanoni, Simone, 2009. "A one-vendor multi-buyer integrated production-inventory model: The 'Consignment Stock' case," International Journal of Production Economics, Elsevier, vol. 118(1), pages 225-232, March.
    6. Sucky, Eric, 2005. "Inventory management in supply chains: A bargaining problem," International Journal of Production Economics, Elsevier, vol. 93(1), pages 253-262, January.
    7. S W Lam & L C Tang, 2006. "Multiobjective vendor allocation in multiechelon inventory systems: a spreadsheet model," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 57(5), pages 561-578, May.
    8. Po-Yu Chen, 2017. "Optimal Retail Price Model for Partial Consignment to Multiple Retailers," Complexity, Hindawi, vol. 2017, pages 1-11, December.
    9. Glock, Christoph H., 2012. "The joint economic lot size problem: A review," International Journal of Production Economics, Elsevier, vol. 135(2), pages 671-686.
    10. Zhou, Yong-Wu & Min, Jie & Goyal, Suresh K., 2008. "Supply-chain coordination under an inventory-level-dependent demand rate," International Journal of Production Economics, Elsevier, vol. 113(2), pages 518-527, June.
    11. Bylka, Stanislaw, 2003. "Competitive and cooperative policies for the vendor-buyer system," International Journal of Production Economics, Elsevier, vol. 81(1), pages 533-544, January.
    12. Kim, Seung-Lae & Ha, Daesung, 2003. "A JIT lot-splitting model for supply chain management: Enhancing buyer-supplier linkage," International Journal of Production Economics, Elsevier, vol. 86(1), pages 1-10, October.
    13. Kaya, Onur & Kubalı, Deniz & Örmeci, Lerzan, 2013. "A coordinated production and shipment model in a supply chain," International Journal of Production Economics, Elsevier, vol. 143(1), pages 120-131.
    14. Hu, Kuo-Jen & Yu, Vincent F., 2016. "An integrated approach for the electronic contract manufacturer selection problem," Omega, Elsevier, vol. 62(C), pages 68-81.
    15. Bylka, Stanislaw, 2009. "Non-cooperative strategies for production and shipments lot sizing in the vendor-buyer system," International Journal of Production Economics, Elsevier, vol. 118(1), pages 243-252, March.
    16. Xia, Weijun & Wu, Zhiming, 2007. "Supplier selection with multiple criteria in volume discount environments," Omega, Elsevier, vol. 35(5), pages 494-504, October.
    17. Beullens, Patrick, 2014. "Revisiting foundations in lot sizing—Connections between Harris, Crowther, Monahan, and Clark," International Journal of Production Economics, Elsevier, vol. 155(C), pages 68-81.
    18. Zhou, Yong-Wu & Wang, Sheng-Dong, 2007. "Optimal production and shipment models for a single-vendor-single-buyer integrated system," European Journal of Operational Research, Elsevier, vol. 180(1), pages 309-328, July.
    19. Wang, Ge & Huang, Samuel H. & Dismukes, John P., 2004. "Product-driven supply chain selection using integrated multi-criteria decision-making methodology," International Journal of Production Economics, Elsevier, vol. 91(1), pages 1-15, September.
    20. Ghodsypour, S. H. & O'Brien, C., 2001. "The total cost of logistics in supplier selection, under conditions of multiple sourcing, multiple criteria and capacity constraint," International Journal of Production Economics, Elsevier, vol. 73(1), pages 15-27, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:121:y:2009:i:2:p:482-493. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.