Portfolio optimisation of material purchase considering supply risk – A multi-objective programming model

Jun Hao, Jianping Li, Dengsheng Wu and Xiaolei Sun

International Journal of Production Economics, 2020, vol. 230, issue C

Abstract: For the sake of better coping with the problem of material procurement, a multi-objective optimisation model was established in a systematic analysis framework for material procurement considering supply risk. First, this paper combs and identifies supply risk factors and constructs a supply risk evaluation system from the dimensions of quality, price, delivery, service and technology. Second, based on the linguistic scale and fuzzy theory, this paper measures the supply risk of candidate suppliers and estimates the relevant parameters of the multi-objective optimisation model by using the triangular fuzzy numbers. In addition, an improved non-dominated sorting genetic algorithm II (NSGA-II) is utilized in this paper to solve the multi-objective model, since traditional intelligent algorithms have slow convergence speed and are easily trapping into local optimisation. Finally, this paper conducts simulation experiments by setting three types of decision-makers with different risk preferences and provides material procurement combination schemes in different scenarios. Through numerical simulation experiments, it was verified that the optimisation model established in this paper was feasible and useful for the selection of candidate suppliers and the portfolio optimisation of material procurement.

Keywords: Multi-objective optimisation; Supply risk; Material purchase; NSGA-II (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S092552732030178X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:230:y:2020:i:c:s092552732030178x

DOI: 10.1016/j.ijpe.2020.107803

Access Statistics for this article

International Journal of Production Economics is currently edited by Stefan Minner

More articles in International Journal of Production Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().