Multi-item supplier selection and lot-sizing planning under multiple price discounts using augmented ε-constraint and Tchebycheff method

Supplier selection and material procurement planning are the most important issues in supply chain management. This decision is complicated when the buyers are faced with discount price schemes. In real situation, each supplier may apply different methods such as different types of discount schedules and various types of payment in order to increase market share. In this situation, buyers try to select the best supplier by considering all tangible and intangible factors which may be included in this decision problem. Mohammad Ebrahim and Razmi (Adv Eng Softw 40:766–776, 2009), introduced a metaheuristic model in order to select the best suppliers and determine the procurement plan under two types of discount offer. In this paper, a fuzzy bi-objective model is proposed for multiple item, multiple period, supplier selection, and purchasing problem under capacity constraint and budget limitation. This model includes different kinds of discount (all-unit discount, incremental discount, and total business volume discount). Different methods for payments which ordinarily may be proposed by each supplier are considered in this paper. Finally, ε-constraint method and reservation-level-driven Tchebycheff procedure are applied to solve this bi-objective model. The efficiency of each method is tested by using an additive utility function which is offered by a decision maker.