Multi-object decision making for supplier selection in outsourcing

A supply chain is the system of organizations, people, technology, activities, information,and resources involved in moving a product or service from supplier to customer. Themain and basic challenges in the supply chain are to plan a strategy to manage theresources and meet the demands, to select the suppliers that will deliver the goods andservices that are required to build the product, to manufacture the product, to deliver theproduct to the customers and to make an arrangement for return of the products throughcustomers if there is any fault in the product for servicing. This thesis study concentrateson supplier selection problem. Recently, outsourcing has become the prime part of thecompany. The activities which are not core to the business or not feasible to manufacturein-house are being outsourced to suitable suppliers. The major hurdle in outsourcing is toselect a suitable supplier. The right supplier will lead to the fulfillment of the company’sneeds and will help increase the financial stability as well as the reputation of thecompany in the market. The selection of suppliers depends on number of criteria and it ispossible that one supplier satisfies some of the selected criteria, a company is looking into, but not the remaining others and the other supplier may satisfy the other ones but notthe first ones. The challenge is to optimize selection process based on critical criteria andselect the best supplier(s). The supplier selection problems are multi-objective problemsand no single methodology appears to be dominant in solving supplier selection problem.This thesis study has attempted to advance the art of supply chain management bydeveloping a heuristic methodology “Integrated Evolutionary Goal Trade-off (IEGT)Method” which simplifies the task of supplier selection and reduces the tediousness aswell as the degree of error by directly involving the Decision Maker into the selectionprocess. The “IEGT” method is highly efficient and it implements the procedure or stepsof the Posteriori Articulation method in which after the solutions are presented to theDecision Maker, it incorporates combination of different methods like EvolutionaryAlgorithm Method, Goal Programming Method and STEM Method to reach the finaloptimal supplier(s).