A nonlinear multiobjective approach for the supplier selection, integrating transportation policies

Purpose - The impact of transportation on the supplier selection has received very scant attention in the literature. This is a great limitation because splitting orders across multiple suppliers will lead to smaller transportation quantities which will likely imply larger transportation cost. Moreover, transportation and inventory elements are highly interrelated and contribute most to the total logistics costs. This paper seeks to present a nonlinear multiobjective programming approach of selecting suppliers and allocating the order quantity among them, taking into account transportation. Design/methodology/approach - The model considers the total product cost and the lead-time as the criteria to minimize simultaneously. Findings - The total cost is the sum of transportation, inventory and ordering costs. The constraints related to suppliers and buyer are also considered in the model. The model is solved several times, evaluating various scenarios. Each scenario depends on the shipment type used between the suppliers and the buyer. Originality/value - This paper fills a gap in the literature by comprehensively examining the role of transportation in determining the optimal number of suppliers and the portion of the order to allocate to each one.