A goal programming approach for business allocation problem in entrepreneur development programme

This study is concerned with multi-objective multi-criteria constrained allocation problems. An integration of Lexicographic Goal Programming and Analytic Hierarchy Process (AHP) modelling is presented which allows the inclusion of multiple goals and brings together the choice of criteria for vendor selection, the selection of vendors and the allocation of the business between vendors. The model is developed and applied to a government sponsored Entrepreneur Development Programme. The scheme has 68 possible vendor companies and is run by a commercial organisation on behalf of the government. The model, known as the Vendor Allocation Model (VAM), has three priority goals subject to five groups of constraints. One of the constraints is vendor rating, which measures the ability of vendors in producing and delivering the product allocated to them. The vendor rating is measured using eight criteria and thirteen sub-criteria obtained from the company running the scheme and ranked using AHP. These criteria ranked in order of priority are delivery, quality, facility, technical capability, financial, management, discipline and responsiveness. Other goal constraints are model demand, product quality, factory maximum operating capacity and minimum business allocation. The results from this model showed that the multi-objective multi-criteria problem faced in the Entrepreneur Development Programme is very complex and cannot be solved by a generalised single value criterion. It needs more dynamic procedures as suggested and implemented in VAM by using Target Levels to capture the dynamic nature of the problem.