John R. Current

Vendor selection criteria and methods

Abstract The vendor selection process has undergone significant changes during the past twenty years. These include increased quality guidelines, improved computer communications, and increased technical capabilities. Given radical changes in the purchasing selection process, it is appropriate to review the past research and to determine its relevance to the supplier selection decision. This paper reviews, annotates, and classfies 74 related articles which have appeared since 1966. Specific attention is given to the criteria and analytical methods used in the vendor selection process. In response to the increased interest in Just-In-Time (JIT) manufacturing strategies, and analysis of JITs impact on vendor selection is also presented. Finally, conclusions and potential areas for future research are presented.

A multiobjective approach to vendor selection

Abstract Purchases from vendors involve significant costs for many firms. Decisions related to these purchases include the selection of vendors and the determination of order quantities to be placed with the selected vendors. Such decisions are frequently multiobjective in nature. That is, they are evaluated by more than one criterion. At least 23 criteria for various vendor selection problems have been identified. In this article, we present a multiobjective approach to systematically analyze the inherent tradeoffs involved in multicriteria vendor selection problems. The approach is motivated by, and demonstrated with, an actual purchasing problem facing a division of a Fortune 500 company.

Theory and methodology

Abstract The hierarchial network design problem with transshipment facilites was first formulated in Current, J. (1988), “The design of a hierarchical transportation network with transshipment facilities”, Transportation Science 22, 270–277. The objective of the FC-HNDP is to identify a least cost, two-level network. The network must include a primary path from a prespecified origin node to a prespecified terminus node. All nodes not on the primary path must be connected to that path via secondary arcs. In addition, transshipment facilities are required at the intersections of the two network levels. In this paper we present two efficient heuristics for solving the FC-HNDP. These heuristics were based upon a Lagrangian relaxation of the problem. To facilitate this relaxation, we have reformulated the original problem. Results for 240 randomly generated problems are summarized. The heuristics yielded the optimal solution in 72% of these problems. The mean gap between the Lagrangian lower bound and the feasible solution value was 0.38% and the maximum gap was 4.33% of the lower bound.

Multiobjective analysis of facility location decisions

Abstract The study of facility siting decisions has a long and extensive history. As this area of research has evolved, there has been increasing recognition that the complexity of these problems is such that they often have more than one objective. For this paper, we reviewed the broad and multidisciplinary literature of location analysis to uncover the scope of research that has examined the multiobjective aspects of this problem domain. In all, 45 papers were found in a total of 20 journals. Four broad categories of objectives were uncovered. The largest category was, not unexpectedly, cost minimization, which included distance minimization. The second most common category was for demand-oriented objectives which included demand coverage and demand assignment. Only about ten percent of the articles included objectives in either of the last two categories. Profit maximization was one of these while objectives addressing environmental concerns comprised the other. Structurally, the models studied typically reflected the general population of single objective location models. That is, quite often they were siting multiple uncapacitated facilities among a set of discrete, finite location alternatives with deterministic parameters over a single planning period.

Non-cooperative negotiation strategies for vendor selection

Vendor selection decisions are typically multi-objective in nature. In an environment of competing vendors for a product or service, some vendors are selected and some are not. This paper describes three approaches for the selection and negotiation with vendors who were not selected. Furthermore, it describes how in certain situations two multi-criteria analysis tools, multi-objective programming and data envelopment analysis, can be used together for this selection and negotiation process. The paper describes non-cooperative vendor negotiation strategies where the selection of one vendor results in another being left out of the solution.

Dynamic facility location when the total number of facilities is uncertain: A decision analysis approach

Models developed to analyze facility location decisions have typically optimized one or more objectives, subject to physical, structural, and policy constraints, in a static or deterministic setting. Because of the large capital outlays that are involved, however, facility location decisions are frequently long-term in nature. Consequently, there may be considerable uncertainty regarding the way in which relevant parameters in the location decision will change over time. In this paper, we propose two approaches for analyzing these types of dynamic location problems, focussing on situations where the total number of facilities to be located in uncertain. We term this type of location problem NOFUN (Number Of Facilities Uncertain). We analyze the NOFUN problem using two well-established decision criteria: the minimization of expected opportunity loss (EOL), and the minimization of maximum regret. In general, these criteria assume that there are a finite number of decision options and a finite number of possible states of nature. The minisum EOL criterion assumes that one can assign probabilities for the occurrence of the various states of nature and, therefore, find the initial set of facility locations that minimize the sum of expected losses across all future states. The minimax regret criteria finds the pattern of initial facility locations whose maximum loss is minimized over all possible future states.

Multiobjective transportation network design and routing problems: Taxonomy and annotation

In this paper we update an earlier review of multiobjective network design and routing problems. Forty-one articles are annotated. The diversity of objectives presented demonstrates the multiobjective nature of such problems and the difficulty of measuring these objectives in commensurate units. The variety of problems addressed reflects the importance and complexity of transportation network analysis.

Multiobjective design of transportation networks: Taxonomy and annotation

Abstract Transportation planning is inherently multiobjective in nature. Transportation planning objectives include cost, accessibility, environmental concerns, revenue, and regional equity among others. Multiobjective techniques for the evaluation of transportation planning alternatives have appeared in the literature since the mid 1960s. However, few articles dealing with the multiobjective design of transportation planning alternatives appeared in the literature prior to the mid 1970s. Since then there has been an increase in research in this area. In this article we present a taxonomy to classify this research. An annotated bibliography of 42 selected references is included. A brief history of the use of multiobjective analysis in transportation planning is also presented.

The maximum covering/shortest path problem: A multiobjective network design and routing formulation

Abstract In this paper the authors introduce the maximum covering/shortest path problem and the maximum population/shortest path problem, a special case of the former model. Both models are formulated as two objective integer programs. A summary of the results of a sample problem for the latter formulation is given. Possible modifications to, and extensions and applications of both models are also presented. With these formulations the authors extend the concept of ‘coverage’ from facility location analysis to network design and routing analysis.

A Lagrangian relaxation-based heuristic for the vehicle routing with full container load

We address a problem of vehicle routing that arises in picking up and delivering full container load from/to an intermodal terminal. The substantial cost and time savings are expected by efficient linkage between pickup and delivery tasks, if the time of tasks and the suitability of containers for cargo allow. As this problem is NP-hard, we develop a subgradient heuristic based on a Lagrangian relaxation which enables us to identify a near optimal solution. The heuristic consists of two sub-problems: the classical assignment problem and the generalized assignment problem. As generalized assignment problem is also NP-hard, we employ an efficient solution procedure for a bin packing based problem, which replaces the generalized assignment problem. The heuristic procedure is tested on a wide variety of problem examples. The test results demonstrate that the procedure developed here can efficiently solve large instances of the problem.