Comprehensive quantity discount model for dynamic green supplier selection and order allocation

We model and solve a deterministic multi-period single-product green supplier selection and order allocation problem in which the considered suppliers’ availability, cost, and green performance change from one period to another in the planning horizon. Moreover, the available suppliers may offer an...

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Vydáno v:Computers & operations research Ročník 160; s. 106372
Hlavní autoři: Hamdan, Sadeque, Cheaitou, Ali, Shikhli, Amir, Alsyouf, Imad
Médium: Journal Article
Jazyk:angličtina
Vydáno: Elsevier Ltd 01.12.2023
Témata:
Bi-objective optimization
Green supplier selection
Multi-criteria decision-making (MCDM)
Order allocation
Quantity discounts
Supplier availability
Supplier availability
Green supplier selection
Multi-criteria decision-making (MCDM)
Bi-objective optimization
Order allocation
Quantity discounts
ISSN:0305-0548
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Abstract We model and solve a deterministic multi-period single-product green supplier selection and order allocation problem in which the considered suppliers’ availability, cost, and green performance change from one period to another in the planning horizon. Moreover, the available suppliers may offer an all-unit or an incremental quantity discount (QD) scheme, resulting in three problem configurations. In one configuration, all suppliers offer all-unit QD. In the second, all suppliers offer incremental QD. In the third, some suppliers offer all-unit QD, and others offer incremental QD. The problem is modeled using a bi-objective integer linear programming formulation that maximizes the total green value of the purchased items from all the suppliers and minimizes their total corresponding cost, including the fixed cost, variable cost, inventory holding cost, and shortage cost. The proposed bi-objective model is scalarized and solved using the branch-and-cut algorithm and a population-based heuristic. A numerical analysis is conducted, which allows first to validate the heuristic approach using small-size instances by comparing its results with those of the exact approach. Moreover, an extensive comparison between the exact and heuristic solution approaches is carried out. The results reveal different findings. First, the economic and environmental solutions of an instance are different, and the environmental solution is independent of the suppliers’ pricing schemes. Second, the maximum difference between the heuristic approach and the exact approach in terms of the bi-objective function value is 4.72%, which makes the proposed heuristic recommended for large-size instances due to its short computation time and good accuracy. Third, there is no difference in terms of the heuristic performance between the combined model and the models with a single type of discount. Fourth, the all-unit discount scheme seems to be generally better in terms of the trade-off between the green value of purchasing and cost. •We study a supplier selection and order allocation problem with green criteria.•Three quantity discount configurations are considered: all-unit, incremental and combined.•A bi-objective model is solved using both exact and population-based approaches.•An extensive numerical study shows the effectiveness of the approach.•A software is developed to guide procurement managers in making decisions.
AbstractList We model and solve a deterministic multi-period single-product green supplier selection and order allocation problem in which the considered suppliers’ availability, cost, and green performance change from one period to another in the planning horizon. Moreover, the available suppliers may offer an all-unit or an incremental quantity discount (QD) scheme, resulting in three problem configurations. In one configuration, all suppliers offer all-unit QD. In the second, all suppliers offer incremental QD. In the third, some suppliers offer all-unit QD, and others offer incremental QD. The problem is modeled using a bi-objective integer linear programming formulation that maximizes the total green value of the purchased items from all the suppliers and minimizes their total corresponding cost, including the fixed cost, variable cost, inventory holding cost, and shortage cost. The proposed bi-objective model is scalarized and solved using the branch-and-cut algorithm and a population-based heuristic. A numerical analysis is conducted, which allows first to validate the heuristic approach using small-size instances by comparing its results with those of the exact approach. Moreover, an extensive comparison between the exact and heuristic solution approaches is carried out. The results reveal different findings. First, the economic and environmental solutions of an instance are different, and the environmental solution is independent of the suppliers’ pricing schemes. Second, the maximum difference between the heuristic approach and the exact approach in terms of the bi-objective function value is 4.72%, which makes the proposed heuristic recommended for large-size instances due to its short computation time and good accuracy. Third, there is no difference in terms of the heuristic performance between the combined model and the models with a single type of discount. Fourth, the all-unit discount scheme seems to be generally better in terms of the trade-off between the green value of purchasing and cost. •We study a supplier selection and order allocation problem with green criteria.•Three quantity discount configurations are considered: all-unit, incremental and combined.•A bi-objective model is solved using both exact and population-based approaches.•An extensive numerical study shows the effectiveness of the approach.•A software is developed to guide procurement managers in making decisions.
ArticleNumber 106372
Author Shikhli, Amir
Hamdan, Sadeque
Cheaitou, Ali
Alsyouf, Imad
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  surname: Hamdan
  fullname: Hamdan, Sadeque
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  organization: Kent Business School, University of Kent, Canterbury CT2 7PE, United Kingdom
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  givenname: Ali
  orcidid: 0000-0003-4497-7537
  surname: Cheaitou
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  surname: Shikhli
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  givenname: Imad
  surname: Alsyouf
  fullname: Alsyouf, Imad
  email: ialsyouf@sharjah.ac.ae
  organization: Industrial Engineering and Engineering Management Department, University of Sharjah, 27272 Sharjah, United Arab Emirates
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Keywords Supplier availability
Green supplier selection
Multi-criteria decision-making (MCDM)
Bi-objective optimization
Order allocation
Quantity discounts
Language English
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Snippet We model and solve a deterministic multi-period single-product green supplier selection and order allocation problem in which the considered suppliers’...
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StartPage 106372
SubjectTerms Bi-objective optimization
Green supplier selection
Multi-criteria decision-making (MCDM)
Order allocation
Quantity discounts
Supplier availability
Title Comprehensive quantity discount model for dynamic green supplier selection and order allocation
URI https://dx.doi.org/10.1016/j.cor.2023.106372
Volume 160
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