Quadratic programming model for optimal decision making of supplier selection problem integrated with inventory control problem

Abstract

In this paper, we propose a quadratic programming model to determine the optimal decision for integrated supplier selection and inventory control. The corresponding optimization is solved by using constrained quadratic optimization method i.e. Karush-Kuhn-Tucker Method performed in LINGO 17.0 to determine the optimal joint decisions which are the optimal supplier and the optimal inventory. A numerical experiment was performed to analyze the model with a multi-product, multi-supplier, multi-carrier and multi-period inventory system. From the results we have found, we can find the optimal supplier for each product and each period.