A mixed-integer non-linear program to model dynamic supplier selection problem

In a highly competitive scenario, suppliers play a vital role in making a business organization successful. Business of any organization is continuous process and therefore the supplier selection is also dynamic in nature. This is quite natural as the organization’s demand; supplier’s capacity, quality level, lead time, unit part cost and fixed transportation cost of supplier varies with time. Therefore, supplier identified for one period may not necessarily be same for the next period to supply the same set of parts. Hence, the supplier selection problem is highly dynamic in real practice. In this paper, a mixed-integer non-linear program (MINLP) is developed to address the dynamic supplier selection problem (DSSP). To validate the proposed MINLP data are generated randomly. A numerical illustration is also provided to demonstrate the proposed MINLP using LINGO.