An effective supplier selection method for constructing a competitive supply-relationship

  • Authors:

  • Gye Hang Hong;Sang Chan Park;Dong Sik Jang;Hyung Min Rho

  • Affiliations:

  • Industrial System and Information Engineering, Korea University, Seoul, South Korea and Department of Industrial Engineering, Korea Advanced Institute of Science and Technology, KAIST 373-1 Kusong ...;Department of Industrial Engineering, Korea Advanced Institute of Science and Technology, KAIST 373-1 Kusong-dong, Yusong-ku, Taejon 305-701, South Korea;Industrial System and Information Engineering, Korea University, Seoul, South Korea;CADCAM Research Center, Korea Institute of Science and Technology, Seoul, South Korea

  • Venue:
  • Expert Systems with Applications: An International Journal
  • Year:
  • 2005

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Abstract

We propose an effective supplier selection method to maintain a continuous supply-relationship with suppliers. Costs have been sharply increasing and profit decreasing as the global competition among companies has increased and customer demands have diversified in the current business environment. Many other functions are now outsourced globally to strengthen competition. As a result, one of the issues is how to select good suppliers which can maintain a continuous supply-relationship. We suggest a mathematical programming model that considers the change in suppliers' supply capabilities and customer needs over a period in time. We design a model which not only maximizes revenue but also satisfies customer needs. The suggested model is applied to supplier selection and management of the agriculture industry in Korea.