Efficient Supplier Selection: A Way to Better Inventory Control

Effective supplier evaluation during the purchasing process is important to business, as supplier selection and the success of inventory management depend on how and which suppliers are selected. Given the popularity of supplier selection with inventory control, this chapter presents an actual, complex supplier selection problem involving multiple products where conflicting inventory related attributes such as response time, delivery reliability, stock quantity, service level and the track record of the suppliers, are involved. The challenge for this case firm is to inter-twine supplier selection with inventory management so as to yield the best space utilization, lower inventory carrying cost and increase end customer satisfaction. Our main contribution is to apply fuzzy AHP and fuzzy TOPSIS to rank and choose efficient suppliers through the linguistic ratings of a set of potential suppliers. Under the environment of global competition, accurate demand fulfilment has become more significant than ever before in supply chain management. As a result, we consider stochastic demand parameters and model the problem with the help of triangular fuzzy numbers. A multi-objective mixed integer linear optimization model is formed to assign the order volume to the selected supplier(s), with a view to executing inventory control visually on a user interface.