A game theoretic model for capacity-constrained supplier selection by considering joint shipment

Document Type : Research Paper

Authors

Department of Industrial Engineering, South Tehran Branch, Islamic Azad University, Tehran, Iran.

Abstract

Supplier selection is one of the most important issues in supply chain management. Recent models in supplier selection are based on total supply chain cost point of view to adjust with growing competition among supply chains.
The joint decision making of procurement lot-size, supplier selection, production decisions and shipment policy selection has potential to reduce total supply chain costs. In this paper, a single-buyer multi-suppliers model in a two level supply chain is presented and a cooperative game theory model is proposed to analyse the decisions. In this regard, the selected suppliers and total supply chain costs are found. We assumed that the selected suppliers’ setup time interval is integer multipliers of the replenishment cycle time of the buyer and also suppliers are able to outsource their remaining capacities. It is shown that the cooperative model could result in a stable solution with same total supply chain cost as the centralized model and also, when suppliers have equal opportunity costs for each single production capacity, selected suppliers are determined independent from the opportunity cost but when the suppliers have different opportunity costs, the selected suppliers are influenced by the opportunity cost that they have. A numerical example describes the findings.

Keywords

Main Subjects


[1]       Aissaoui, N., Haouari, M,.Hassini, E., (2007). “Supplier selection and order lot sizing modeling: a review”, Computers and Operations Research, 34: 3516–3540.
[2]        Wetzstein, A., Hartman, E., Benton, W.C., Hohenstein, N., (2016). “A systematic assessment of supplier selection literature – State-of-the-art and future scope”, Intern. Journal of Production Economics, 182: 304-323.
[3]        Kamali, A., FatemiGhomi, S.M.T., Jolai, F., (2011). “A multi-objective quantity discount and joint optimization model for coordination of a single-buyer multi-vendor supply chain”, Computers Math Appl, 62: 3251–3269.
[4]        Ho, W., Xu, X., Dey, P.K., (2010). “Multi-criteria decision making approaches for supplier evaluationand selection: A literature review”, Eur. J. Oper. Res., 202: 16–24.
[5]        Kheljani, J., Ghodsypour, S.H., O’Brien, C., (2009). “Optimizing whole supply chain benefit versus buyer’s benefit through supplier selection”, Int J Prod Econ, 121: 482–493.
[6]        Rezaei, J., Davoodi, M., (2013). “Multi-objective models for lot-sizing with supplier selection”, International Journal of Production Economics, 130(1): 77–86.
[7]        Lee, A.H.I., Kang, H.Y., Lai, C.M., Hong, W.Y., (2013). “An integrated model for lot sizing with supplier selection and quantity discounts”, Applied Mathematical Modelling, 37(7): 4733–4746.
[8]        Choudhary, D., Shankar, R., (2013). “Joint decision of procurement lot-size, supplier selection, and carrier selection”, Journal of Purchasing & Supply Management, 19: 16–26.
[9]        Mohammaditabar, D., Ghodsypour, H. (2014). A supplier-selection model with classification and joint replenishment of inventory items, International Journal of Systems Science, 47: 1745-1754.
[10]    Amid, A., Ghodsypour, S.H., O’Brien, C., (2011). “A weighted max–min model for fuzzy multiobjective supplier selection in a supply chain”, Int. J. Prod. Econ., 131(1): 139-145.
[11]    Jolai, F., Yazdian, S.A., Shahanaghi, K., Khojasteh, M.A., (2011). “Integrating fuzzy TOPSIS and multiperiodgoal programming for purchasing multiple products from multiple suppliers”, J. of Purch Supply Manage, 17: 42–53.
[12]    Sevkli, M., Koh, S.C.L., Zaim, S., Demirbag, M., Tatoglu, E., (2008). “Hybrid analytical hierarchy processmodel for supplier selection”, Ind Manage Data Syst, 108(1): 122-142.
[13]    Bruno G., Esposito E., Genovese A., Passaro R., (2011). “AHP BASED METHODOLOGIES FOR SUPPLIERS SELECTION: A CRITICAL REVIEW”, the International Symposium on the Analytic Hierarchy Process.
[14]    Drechsel J., Kimms A., (2010). “Computing core allocations in cooperative games with an application to cooperative procurement”, Int. J. Prod. Econ., 128: 310–321.
[15]    Barron, E.N., (2013). “Game Theory: An Introduction”, second ed., John Wiley & sons, New York.
[16]    Huang, Y., Huang, G.Q., Newman, S., (2011). “Coordinating pricing and inventory decisions in a multi-level supply chain: A game-theoretic approach”, Transportation Research Part E, 47: 115-129.
[17]    Huang Y., Huang, G.Q., Liu X., (2012). “Cooperative Game-theoretic Approach for Supplier Selection, Pricing and Inventory Decisions in a Multi-level Supply Chain”, International Multi Conference of Engineers and Computer Scientists, Hong Kong.
[18]    Zhao, X., Atkins, D., Hu, M., Zhang, W., (2016). “Revenue Management under Joint Pricing and Capacity Allocation Competition”, European Journal of Operational Research.
[19]    Yin, S., Nishia, T., Zhangb, G., (2013). “A Game Theoretic Model to Manufacturing Planning with Single Manufacturer and Multiple Suppliers with Asymmetric Quality Information”, Forty Sixth CIRP Conference on Manufacturing Systems, Procedia CIRP, 7: 115 – 120.
[20]    Yin S., Nishi T., (2014). “A Supply Chain Planning Model With Supplier Selection under Uncertain Demands and Asymmetric Information”, the 47th CRIP Conference on Manufacturing Systems, Procedia CRIP, 17: 639-644.
[21]    Wu, Q., Ren, H., Gao, W., Ren, J., Lao, Ch., (2017). “Profit allocation analysis among the distributed energy network participants based on Game-theory”, Energy, 1-12.
[22]    Mohammaditabar, D., Ghodsypour, H., Hafezalkotob, A., (2016). “A game theoretic analysis in capacity-constrained supplier-selection and cooperation by considering the total supply chain inventory costs”, International Journal of Production Economics, 181: 87-97.
[23]    Dror, M., Hartman, B., (2011). “Survey of Cooperative Inventory Games and Extensions”, Journal of the Operational Research Society, 62: 565-580.
[24]    Leng, M., Parlar, M., (2005). “Game theoretic applications in supply chain management: a review”. INFOR, 43: 187–220.
[25]    Esmaeili Aliabadi, D., Kaazemi, A., Pourghannad, B., (2013). “A two-level GA to solve an integrated multi-item supplier selection model”, Applied Mathematics and Computation, 219: 7600-7615.
[26]    Kelle, P., Al-khateeb, F., Miller Pam, A., (2003). “Partnership and negotiation support by joint optimal ordering-setup policies for JIT”, International Journal of Production Economics.
[27]   Bauso, D., Giarre, L., Pesenti, R., (2008). “Consensus in noncooperative dynamic games: a multiretailer inventory application”, IEEE Transactions on Automatic Control. 53: 998–1003.
[28]   Jazemi, R., Ghodsypour, SH., Kheljani, J., (2011). “Considering supply chain benefit in supplier selection problem by using information sharing benefits”, IEEE Transactions on Industrial Informatics. 7(3): 517-526.
[29]   Elomri, A., Ghaffari, A., Jemai, Z., Dallery, Y., (2012). “Coalition formation and cost allocation for joint replenishment systems”, Production and Operations.
[30]    Agnetis, A., Mirchandani, P.B., Pacciarelli, D., Pacifici, A., (2004). “Scheduling problems with two competing agents”, Operations Research, 52(2): 229-24.
[31]    Fiestras-Janeiro, M.G., Garcia-Jurado, I., Meca, A., Mosquera, M.A. (2011). “Cooperative game theory and inventory management”, European Journal of Operational Research, 210: 459–466.
[32]    Axsater, S., (2015). “Inventory Control”, (3rd edition). Springer. 225: 45-60.
[33]    Mohebbi, S., Li, X., (2015). “Coalitional game theory approach to modeling suppliers' collaboration in supply networks”, International Journal of Production Economics, 169: 333-342.
[34]    Shapley, L.S., (1953). “A value for n-person games”, Ann Math Stud, 28: 307–317.
[35]    Branzei, R., Dimitrov, D., Tijs, S., (2008). “Models in cooperative game theory”, Springer Science & Business Media.
[36]    Hafezalkotob, A., Makui, A., (2015). “Cooperative maximum-flow problem under uncertainty in logistic networks”, Applied Mathematics and Computation, 250: 593-604.
[37]    MirasCalvo,M.A.,SanchezRodrı/guez, E., (2006). TUGlab: ACooperative Game Theory Toolbox. http://webs.uvigo.es/mmiras/TUGlab/TUGl abICM06.pdf (accessed 08,01,13).