Supplier selection and supply quantity allocation of common and non-common parts with multiple criteria under multiple products

With limited capacity of suppliers, how to reduce the total operating cost of the enterprise by determining the most suitable production capacity allocation has become the major issue faced by various enterprises in producing multiple types of products. In addition, when manufacturing multiple types of products, due to the high demand of common and non-common parts, which is applicable to various products, enterprises will place special emphasis on the procurement of common and non-common parts, to select most suitable suppliers of parts with the highest quality and minimum time and costs, in order to cut down on operating costs of enterprises. This research first lists parts of various products through bill of material (BOM), and constructs an optimal mathematical model suitable for multi-phase products' parts, in order to assess the assembling relationship of various parts; it makes use of the linkage among those to select the supplier of common and non-common parts when assessing multiple products. Then considering the limited production capacity of suppliers, it selects the best combination of suppliers of special common and non-common parts. To solve the optimal mathematical model, a genetic algorithm (GA) is proposed to find the acceptable results of the supply selection and quantity allocation problem. It then provides a benchmark for enterprise in current diversified market to purchase and assess common and non-common parts, and makes such benchmark a normal standard for selection of suppliers in the future. (C) 2007 Elsevier Ltd. All rights reserved.