An integrated supplier selection and order allocation approach in a battery company

Firms should work with suppliers in order to provide direct and indirect materials and components. Thus, purchasing decision is very important in a firm. The question of ‘who to buy from and how much’ is simply the supplier selection problem that every firm faces. In this problem, there is more than one concern that the decision maker needs to deal with. Hence, supplier selection is a multi-criteria problem which includes both tangible and intangible factors. When capacity constraints exist, this problem becomes more complicated as, in these circumstances, purchasers should decide about two issues: ‘which suppliers are the best’ and ‘how much should be purchased from each selected supplier’. The aim of this study is to solve the supplier selection and order allocation problem of a battery company. In the scope of the study, an integrated approach based on analytical hierarchy process and goal programming is proposed to consider both tangible and intangible factors in choosing the best suppliers and placing the optimum order quantities among them.