In this paper, we consider a multi-period integrated supplier selection and order lot
sizing problem where a single buyer plans to purchase a single product in multiple
periods from several qualified suppliers who are able to provide the required product
with the needed quality in a timely manner. Product price and order cost differs
among different suppliers. Buyer’s demand for the product is deterministic and varies
for different time periods. The problem is to determine how much product from which
supplier must be ordered in each period such that buyer’s demand is satisfied without
violating some side constraints. We have developed a mathematical programming
model to deal with this problem, and proposed a forward dynamic programming
approach to obtain optimal solutions in reasonable amount of time even for large scale
problems. Finally, a numerical example is conducted in which solutions obtained from
the proposed dynamic programming algorithm is compared with solutions from the
branch-and-bound algorithm. Through the numerical example we have shown the
efficiency of our algorithm.
sizing problem where a single buyer plans to purchase a single product in multiple
periods from several qualified suppliers who are able to provide the required product
with the needed quality in a timely manner. Product price and order cost differs
among different suppliers. Buyer’s demand for the product is deterministic and varies
for different time periods. The problem is to determine how much product from which
supplier must be ordered in each period such that buyer’s demand is satisfied without
violating some side constraints. We have developed a mathematical programming
model to deal with this problem, and proposed a forward dynamic programming
approach to obtain optimal solutions in reasonable amount of time even for large scale
problems. Finally, a numerical example is conducted in which solutions obtained from
the proposed dynamic programming algorithm is compared with solutions from the
branch-and-bound algorithm. Through the numerical example we have shown the
efficiency of our algorithm.