INDECS

VENDOR SELECTION AND SUPPLY QUOTAS
DETERMINATION BY USING THE ANALYTIC
HIERARCHY PROCESS AND A NEW
MULTI-OBJECTIVE PROGRAMMING METHOD

Tunjo Perić¹ http://orcid.org/0000-0002-0886-8037,
Zoran Babić² and
Emina Resić³ http://orcid.org/0000-0002-2293-3974

¹Faculty of Economics & Business, University of Zagreb
  Zagreb, Croatia
²Faculty of Economics, University of Split
  Split, Croatia
³School of Economics and Business, University of Sarajevo
  Sarajevo, Bosnia and Herzegovina

INDECS 15(1), 89-103, 2017
DOI 10.7906/indecs.15.1.7
Full text available here.

Received: 31 October 2016
Accepted: 28 February 2017
Regular article

ABSTRACT

In this article, we propose a new methodology for solving the vendor selection and the supply quotas determination problem.
The proposed methodology combines the Analytic Hierarchy Process (AHP) for determining the coefficients of the objective functions and a new multiple objective programming method based on the cooperative game theory for vendor selection and supply quotas determination.
The proposed methodology is tested on the problem of flour purchase by a company that manufactures bakery products.
For vendor selection and supply quotas determination we use three complex criteria: (1) purchasing costs, (2) product quality, and (3) vendor reliability.

KEY WORDS

analytic hierarchy process, multi-objective programming methods, vendor selection

CLASSIFICATION

JEL: C61, M11