Using Group Decision Making Techniques and Optimizing Purchase Plan to Rank Suppliers (Case Study: IKCO Spare Parts & After Sales Services ISACO)

Supply chain management is a new issue in the field of industrial management. In the current changing business environment, communication between different parts of the supply chain is important. One of the most important parts of a supply chain is material purchasing from different suppliers as a major part of the marginal cost of a product is raw material cost. Selecting suppliers correctly will reduce procurement costs and increase the competitiveness of companies. Moreover, one of the most important decisions that must be considered is determination of order quantity. As an automobile is comprised of thousands of parts, choosing the right suppliers and determination of orders quantity are very important in the Automotive Industry. In this paper, we firstly identify the criteria for the selection of suppliers of ISACO Company. Then, suppliers of consumable items are ranked using group decision making techniques. Finally, we determine optimum purchase plan using a mixed integer programming model. The results of this paper which shows the best supplier of consumable items and the optimum purchase quantity can help ISACO to manage suppliers properly. For example we demonstrate that one supplier has priority for buying the most consumable items or another supplier isn’t suitable for any purchase.