Integrated DANP and binary goal programming model in generating joint-decision making for packaging postponement and supplier selection

Gunawan, Ivan; Trihastuti, Dian; Kumar, Ajay; Tan, Kim Hua

Abstract

This article explores the application of goal programming (GP) for improving tactical decision-making in supply chains. GP demonstrates flexibility to be integrated with other Multi-Criteria Decision Making (MCDM) methods such as Decision-Making Trial Evaluation and Laboratory (DEMATEL)-based Analytic Network Process (ANP) (DANP) to support better business decisions. Joint-decision making of packaging postponement and supplier selection involving two business functions: logistics and purchasing, effectively reduce the supply chain cost. This research proposes integrating the DANP and binary goal programming (BGP) model to generate optimal joint decision-making of packaging postponement and supplier selection. Based on a case of a shoe company in Indonesia, this research identifies the optimal trade-off between packaging and transportation costs. The findings show that the company needs to apply the packaging postponement to all distribution centres to minimize total cost. The sensitivity analysis illustrates that the decision remains until the packaging cost at the main factory is reduced by 50% or the packaging cost at the distribution centre (DC) is increased by 50%. The optimal solution shows the reduction of average logistics cost by 12.64%. This article provides a practical approach for managers to negotiate packaging prices with suppliers by considering transportation costs.

Citation

Gunawan, I., Trihastuti, D., Kumar, A., & Tan, K. H. (2023). Integrated DANP and binary goal programming model in generating joint-decision making for packaging postponement and supplier selection. Annals of Operations Research, https://doi.org/10.1007/s10479-023-05513-0

• Journal Article Type: Article
• Acceptance Date: Jul 5, 2023
• Online Publication Date: Jul 17, 2023
• Publication Date: Jul 17, 2023
• Deposit Date: Aug 31, 2023
• Publicly Available Date: Jul 18, 2024
• Journal: Annals of Operations Research
• Print ISSN: 0254-5330
• Electronic ISSN: 1572-9338
• Publisher: Springer Verlag
• Peer Reviewed: Peer Reviewed
• DOI: https://doi.org/10.1007/s10479-023-05513-0
• Keywords: Analytic Network Process; Binary goal programming; Joint decision-making; Packaging postponement; Supplier Selection
• Public URL: https://nottingham-repository.worktribe.com/output/24809734
• Publisher URL: https://link.springer.com/article/10.1007/s10479-023-05513-0