Probabilistic Programming with Piecewise Objective Function for Solving Supplier Selection Problem with Price Discount and Probabilistic Demand

Sutrisno Sutrisno, Sunarsih Sunarsih, Widowati Widowati

Abstract


In this article, a supplier selection problem with price discount and probabilistic demand was solved by formulating a new probabilistic programming model with a piecewise objective function. The proposed model was able to be used by the decision-maker to calculate the optimal decision involving the appropriate raw material quantity to be ordered from each supplier to have minimal total procurement cost. A numerical experiment was conducted with some randomly generated data and the results showed the supplier selection problem was solved by the proposed model and the optimal decision value is achieved.

Keywords


piecewise objective function, price discount, probabilistic demand, probabilistic programming, supplier selection

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