Fuzzy Programming Model for Procurement Management under Delivery Shortage

Abstract

This paper proposes a FMIP (fuzzy mixed integer program) to model the procurement process of a manufacturing company which contemplates uncertainty in the delivery of raw materials. The focus of this article lies on the use of fuzzy sets to represent the percentages of failure in the delivery of the amount of materials requested and include it in a mathematical model as an evaluation measure in the performance of each supplier. The main objective of the proposed model is to select the most promising suppliers in order to optimize the quantitative and qualitative performance of the company, by maximizing the net present value (NPV) and providing a better customer service, respectively, in relation with the commitment of delivery of the company’s suppliers. To solve the problem raised, the FMIP model proposed is transformed into an equivalent MILP (mixed integer linear program), and then, several scenarios are solved. An illustrative example is presented to show the utility of the model.