Chapter 5Modeling Supplier Selection in Reverse Supply Chains

Supplier selection is one of the key decisions to be made in the strategic planning ofsupplychainsthathasfar-reachingimplicationsinthesubsequentstagesofplanningandimplementationofthesupplychainstrategies.Intraditional/forwardsupply chain,theproblemofsupplierselectionisnotnew.Firstpublicationsonsupplier selectionintraditional/forwardsupplychainsdatebacktotheearly1960s(Wang et al., 2004). Contrary to a traditional/forward supply chain, however, the strategic, tactical,andoperationalplanningissuesinreversesupplychainsinvolvedecision

5.1 Introduction .................................................................................................. 113 5.2Methodology ................................................................................................. 114

5.2.1Nomenclature Used in the Methodology .......................................... 114 5.2.2Taguchi Loss Functions .................................................................... 114 5.2.3Analytic Hierarchy Process .............................................................. 116 5.2.4 Ranking the Suppliers ...................................................................... 116 5.2.5Fuzzy Programming ......................................................................... 117

5.3Supplier Selection Methodology: A Numerical Example ............................ 119 5.3.1Determining the Order Quantities: Fuzzy Programming ................ 120

5.4Conclusions ................................................................................................... 123 References .............................................................................................................. 123

making under uncertainty (Ilgin and Gupta, 2010). Uncertainty stems from several sources,thequalityandtimingofavailabilityoftheused-productsbeingthemajor ones.Inaddition,therelativeimportanceofthedifferentselectioncriteriavaries foreachsupplier.Atypicalsupplierselectionprobleminvolvesselectingthesuppliersandassigningtheorderquantitiestothosesupplierstakingintoconsideration numerous con¦icting constraints. Traditionally, in supply chain literature, the supplierselectionproblemistreatedasanoptimizationproblemthatrequiresformulatingasingleobjectivefunction.However,notallsupplierselectioncriteriacanbe quantied,becauseofwhich,onlyafewquantitativecriteriaareincludedinthe problem formulation.