A joint pricing, lot-sizing, and supplier selection model

Abstract

In this paper, we integrate the three strategies that are important to most firms, namely pricing, lot-sizing and supplier selection. Combining the three objectives of total profit, inconsistency, and deficiency with a set of constraints, we formulate this integrated problem as a multi-objective nonlinear programming model, proposing a genetic algorithm (NSGA-II) that provides decision-makers with a number of Pareto-optimal solutions, one of which can be selected on the basis of the higher-level information. We analyse the trade-off between the different Pareto-optimal solutions and discuss the results of that analysis. We then evaluate the performance of NSGA-II compared with SPEA2 in solving the model, which shows NSGA-II performs better. Finally, concluding remarks and suggestions for future research are provided.