A Multi-objective Model of Information System Outsourcing Decision for Suppliers Selection

Supplier selection is a critical issue in information systems(IS) outsourcing decision, and it is a difficult problem which includes both tangible and intangible factors. Besides cost and benefit analysis, some intangible factors such as risk also need to be considered. In this paper, a multi-objective programming model is proposed to help outsourcers to select IS providers. This model considers cost and risk factor simultaneously in distribution of modules among candidate suppliers to minimize the total cost and failure rate. Then according to the difficulty of solving of this complicated nonlinear integer programming model, a modified hybrid algorithm is proposed to obtain the most preferred non-dominated solution. This algorithm is a hybrid algorithm combining genetic algorithm and particle swarm algorithm. Finally, a numerical example shows the effectiveness and feasibility of the model, and proved the convergence of the hybrid algorithm.