Two-stage game-theoretic approach to supplier evaluation, selection, and order assignment

This study proposes a framework for supplier evaluation, selection, and assignment that incorporates a two-stage game-theoretic approach method. The objective is to provide manufacturers with insights to choose suitable suppliers for different manufacturing processes. The framework applies to the decision logic of multiple manufacturing processes. In the first stage, a non-cooperative game model is utilized for supplier evaluation and selection. The interactive behaviors between a manufacturer and some supplier candidates are modeled and analyzed so that the Supplier Evaluation Value (SEV) can be obtained using the Nash equilibrium. In the second stage, the SEVs become the input for the Shepley values calculation of each supplier under a cooperative game model. The Shapley values are utilized to create a set of limited supplier allocation. This paper provides managerial insights to verify the viability of the proposed approach for supplier selection and allocation. Thus, it enables Supply Chain Management (SCM) manager to optimize supplier evaluation, selection, and order assignment. (C) 2021 Sharif University of Technology. All rights reserved.