A multi-objective model for purchasing of bulk raw materials of a large-scale integrated steel plant

The cost of purchasing raw materials and components accounts for a significant fraction in the production and manufacturing industry. Modeling of purchasing issues and hence using quantitative methods to study the purchasing issues are significant for a purchasing decision-maker with comparable schemes. This paper is grounded on purchasing of bulk raw materials of a certain large-scale steel plant. It establishes a multi-objective linear programming model for the special issues of purchasing these raw materials, and indicates selecting items, selecting vendors and deciding ordering quantity as the key issue in optimizing purchasing policies. A kind of multi-objective optimal method, the point estimate weighted-sums, is used to solve this model. A group of really numerial computational results show that the model is effective and can take effect on the determination of purchasing decision. In the end of this paper, the future research directions on purchasing of raw materials are pointed out.