Supplier selection and order lot sizing modeling: A review

With globalization and the emergence of the extended enterprise of interdependent organizations, there has been a steady increase in the outsourcing of parts and services. This has led firms to give more importance to the purchasing function and its associated decisions. One of those decisions which impacts all firms' areas is the supplier selection. Since the 1950s, several works have addressed this decision by treating different aspects and instances. In this paper, we extend previous survey papers by presenting a literature review that covers the entire purchasing process, considers both parts and services outsourcing activities, and covers internet-based procurement environments such as electronic marketplaces auctions. In view of its complexity, we will focus especially on the final selection stage that consists of determining the best mixture of vendors and allocating orders among them so as to satisfy different purchasing requirements. In addition, we will concentrate mainly on works that employ operations research and computational models. Thereby, we will analyze and expose the main decision's features, and propose different classifications of the published models. (c) 2006 Elsevier Ltd. All rights reserved.