Multi-objective supplier selection and order allocation under disruption risk

We formulate a multi-objective MILP model to find the optimal choice of suppliers and their order quantity allocation under disruption risk. Suppliers are evaluated and ranked, based on the preference values obtained using a hybrid fuzzy AHP-fuzzy PROMETHEE. Multi-objective Particle Swarm Optimization is then applied to yield a set of Pareto-optimal solutions for the choice of suppliers and their order allocation. Numerical experimentation suggests that the supplier failure probability affects the expected total cost more than supplier flexibility and loss cost. Sensitivity analysis is performed on the failure probability, the output flexibility, and loss cost of the suppliers. (C) 2016 Elsevier Ltd. All rights reserved.