Agent-based supplier selection model for multiple products with synergy effect

Abstract

Supplier selection is an important problem in supply chain management (SCM), and has attracted the attention of many researchers. Most previous research on supplier selection is based on the assumption that a single product is required. For the few supplier selection models for multiple products, they handled the problem on a product-by-product manner. In such cases, the synergy effect between products which could impact the choice of cooperative suppliers is not taken into account. However, it is practical for the purchasing company to procure multiple products simultaneously and benefit from the synergy effect between products. It is necessary to incorporate the synergy effect between products in multi-product supplier selection. This thesis presents a multi-product supplier selection model incorporating the synergy effect between products. The model is composed of three sub-models, i.e., the synergy determination sub-model, the supplier pre-selection sub-model and the negotiation-based final selection sub- model. As the agent-based technology is a natural tool for modeling distributed systems, the proposed multi-product supplier selection model is realized as a multi-agent system (MAS) with agents representing the relevant parties and functions of the proposed model. Agents of the MAS are able to interact with each other through the respective agent interaction protocols defined specifically for the three sub-models. The synergy determination sub-model is to determine the synergy effect between products. The term complementarity is used to represent the synergy effect between products. The product complementarity measure criteria are formulated based on the activities of automobile manufacturers. Complementarity measure methods are then proposed. The product bundle determination algorithm is presented to generate preferred product bundles. The interaction of agents involving in the sub-model is governed by the synergy determination protocol. The supplier pre-selection sub-model is to shortlist the qualified and competitive suppliers for multiple products. The pre-selection criteria catering for the multi-product environment are formulated. Both the general characteristics and performances of suppliers, and the capabilities supporting multi-product transactions are included in the pre-selection criteria. The TOPSIS-based supplier pre-selection algorithm is established to evaluate suppliers on these criteria. The interaction of agents involving in the sub-model is governed by the pre-selection protocol. The negotiation-based final selection sub-model is to select the cooperative suppliers for multiple products. In order to cater for the multi-product environment, multiple bids are allowed in the negotiation model. The corresponding bid utility function and negotiation strategies are presented. The B&B-based winner determination algorithm is presented to determine the cooperative suppliers. The hybrid protocol of combinatorial procurement auction and multi-bilateral bargaining is established to govern the interaction of agents in the sub-model. A case study has been executed to demonstrate the feasibility, effectiveness and usefulness of the supplier selection model for multiple products with synergy effect. The results indicate that the proposed supplier selection model is able to select suppliers for multiple products simultaneously and incorporate the synergy effect between products. In addition, the agent interaction protocols and related algorithms used in the agent-based system supporting the multi-product supplier selection model are suitable and effective.