An integrated multi-objective decision-making process for global supplier selection and order lot sizing under quantity discount environment

The global supplier selection and order allocation problem is more complex than domestic one and it needs more critical analysis. It becomes especially complicated when quantity discounts are considered at the same time. Under such manner, most studies often formulate such a problem as a Multi-Objective Linear Programming (MOLP) problem, and then scale it down to a Mixed Integer Programming (MIP) problem in order to handle the inherited multi-objectives simultaneously. However, this approach often neglects to consider scaling and subjective weighting issues. In order to ease the problem mentioned above and to obtain a more reasonable compromised solution for allocating order quantities among suppliers, an integration of analytical hierarchy process and linear integer and multi-objective programming is proposed in this study. The proposed model can provide not only a framework for the organization to select the global suppliers and allocate order quantities among them, but also has the capability to deploy the organization’s strategy to its suppliers.