A Two-Level Decision Support System For Supplier Diversification

Abstract — In this study, we provide a two-level decision support system for the constitution of supplier pool and order quantity decision for each of the suppliers selected from a predetermined candidate list. The candidate suppliers are the current vendors in the market. The proposed decision support tool integrates a knowledge-based expert system and a genetic algorithm to consider both qualitative and quantitative criteria in supplier selection and order quantity decision. The expert system decreases the candidate suppliers to the most preferred ones according to quality, delivery and management core dimensions. Genetic algorithm then allocates order quantities to each supplier considering quantity discounts, preference factors and capacity constraints. A real-life case study at a steel structures manufacturing company demonstrates an application of the proposed support system. Keywords- expert systems; genetic algorithms; decision support systems; supply chain management; supplier selection I