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A SIMPLE HEURISTIC FOR DYNAMIC ORDER SIZING AND SUPPLIER SELECTION WITH TIME‐VARYING DATA
Author(s) -
TEMPELMEIER HORST
Publication year - 2002
Publication title -
production and operations management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.279
H-Index - 110
eISSN - 1937-5956
pISSN - 1059-1478
DOI - 10.1111/j.1937-5956.2002.tb00474.x
Subject(s) - computer science , heuristic , purchasing , planner , task (project management) , sizing , order (exchange) , operations research , selection (genetic algorithm) , process (computing) , procurement , simple (philosophy) , heuristics , software , industrial engineering , mathematical optimization , operations management , business , marketing , economics , artificial intelligence , art , philosophy , mathematics , management , finance , epistemology , engineering , visual arts , programming language , operating system
In this paper we consider the problem of supplier selection and purchase order sizing for a single item under dynamic demand conditions. Suppliers offer all‐units and/or incremental quantity discounts, which may vary over time. Although the problem refers to a typical planning task of a purchasing agent, which is often solved without algorithmic assistance, in an eBusiness (b2b) environment, the need for the integration of an automatic performance of this planning task into a web‐based procurement process becomes evident. A new model formulation for this problem is developed, and a simple but easily extendible heuristic procedure is presented and tested. The heuristic is implemented as part of the Advanced Planner and Optimizer (apo) software of SAP AG, Walldorf, Germany.