Integration of Grey Relational Analysis and Goal Programming for Supplier selection and planning (Case Study from an Automotive Company)

Abstract

In today's competitive market, manufacturers not only intend to improve internal conditions, but choosing the best of markets and suppliers is at the top of their agenda. Selecting the best alternatives in each of these decisions requires analysis of many factors, which as a result, encounters organizations with a problem of multi-criteria decisions. On the other hand, the application of the grey relational analysis (GRA) in connection with consideration of the criteria in different managerial and operational issues has been referred to in many articles along which goal programming may consider several goals according to the priorities of the decision maker. The combination of these two techniques may create a model that takes into consideration various goals through simultaneous consideration of varied criteria.
In this article, a model of decision making is presented, which evaluates potential suppliers with the help of combination of the grey theory system and goal programming and consideration of various constraints, and ultimately, the best options are selected and the purchasing plan from each in every period is determined as well. For the purpose of examination, the model’s reliability has been evaluated by case basis in a big automotive manufacturing plant, and senior managers have approved the results.