A goal programming approach for supplier evaluation and demand allocation among suppliers

This paper presents a hybrid algorithm for supplier evaluation and demand allocation among the suppliers. The objective here is to minimise the inventory and transportation costs and simultaneously to maximise the total purchase value of the items taking into consideration demand condition, supplier capacity, budget and delivery lead-time constraints. Since the problem is multi-objective decision making, we solve this problem by converting all mixed integer programming objectives in to single objective with the help of goal programming approach. The customer demand is allocated among the suppliers by using a hybrid algorithm based on the technique for order preference by similarity to ideal solution (TOPSIS), fuzzy set theory, MILP, and goal programming approaches. The results are validated by computational experiment and prove the efficacy of the hybrid algorithm.