Research On Spare Parts Supplier Evaluation And Selection For Iron & Steel Enterprises

The continuous supply of spare parts is very essential for the machine running in the iron & steel company. If the work flow is stopped in the workshop due to the lack of spare parts, the company could not make quick responses to its customers in the competitive markets. Supplier evaluation and selection problems are important issues in the spare parts purchasing business. How to evaluate the thousands of different suppliers and select the best supplier as the long-term purchasing partner? How to select the potential suppliers and allocate the purchasing order quantities to maximize the total supplier performance? These questions need to be solved first once the spare parts purchasing activities start.In this paper, we aimed to build a hierarchy for the spare parts evaluation and selection. And with a reasonable evaluation approach, we tried to determine the weights of the different criteria. Thus, we could obtain the final scores and ranking of the suppliers. Then we tried to develop an optimal order quantity allocation model to achieve the highest total score of the allocated suppliers.First, we analyzed the features of the spare parts and the relationship strategy with the suppliers; clarified the goals and the principles of spare parts supplier evaluation; developed a hierarchy with 5 criteria and 16 sub-criteria to describe the evaluation goals. Next, based on the review of the researches about supplier evaluation and selection, we developed a hybrid AHP-information entropy method to determine the integrated weights of suppliers. With this hybrid method, the bias existing in the independent subjective and objective evaluation approaches could be reduced. A numerical example was presented here. First, we calculated the AHP weights and the information-entropy weights respectively. And then, we did the correlation analysis of the criteria to verify the consistency of these two approaches. Next, we calculated the criteria weights and obtained the final scores and rankings of the five alternative suppliers.Followed, we developed the mathematical programming models to solve the order quantity allocation problem. The models were developed to determine the optimal order quantity from the suppliers with consideration of the suppliers' capacities and the buyer's quality requirements of the products and service. We considered the non-discounts and discounts purchasing conditions respectively and built a single-objective linear programming model and a multi-objective programming model accordingly. A numerical example is presented to illustrate the allocation models as well.This paper could provide some reference value to support the purchasing manager in evaluating the spare parts suppliers.