Genetic algorithm for supplier selection and optimal purchase pricing problem in a two-echelon supply chain given the demand curve

This paper investigated the operational issues of a two-echelon supply chain with multiple suppliers and multiple retailers under linear demand function/curve and retailer fixed markup pricing policy for each buyer/retailer. The operational decisions of the model are purchase price and quantity which determine the channel cost of the supply chain. To find out the optimal purchase price and quantity, a mathematical model is formulated for each buyer from several suppliers. Also, for using the genetic algorithm method to solve the formulated problem, the model was modified and then the best value of the parameters was derived. This research anticipates completing optimal parameter combination design in genetic algorithm using Taguchi method. Finally, a numerical example is given to illustrate the model

Keywords:

Genetic algorithm , Two-echelon supply chain , Pricing , Linear demand function/curve , Taguchi method