Optimizing Supplier Selection and Order Allocation in a Tuna Cannery: A Hybrid MCDM and MCGP Approach

Abstract

Suppliers are vital to sustaining a company operation, especially when raw materials are delivered directly to production. Choosing the right suppliers and allocating orders effectively are strategic decisions that can enhance competitiveness and customer satisfaction. This research applies a hybrid MCDM (Multi-Criteria Decision-Making) and MCGP (Multi-Choice Goal Programming) approach to an empirical case within an Indonesian tuna cannery. The company faced production delays caused by a supplier whose performance lagged behind others, prompting the need for a structured supplier selection and order allocation. Criteria weighting is performed via AHP, complemented by the use of triangular fuzzy numbers to reduce uncertainty and ambiguity in expert judgments. Through expert consultation, ten criteria were established, covering aspects such as food safety, code of conduct, quality, on-time delivery, cost, innovation, communication, facility, flexibility, and warranty. Using the fuzzy TOPSIS procedure, Supplier S2 demonstrated superiority among the alternatives, emerging as the most competitive supplier with highest closeness coefficient, followed by S1, S3, and S4. Optimal order quantities were derived through the execution of the MCGP model. Supplier S2 as the primary strategic supplier, allocating the largest order share of 25,000,000 pieces. Meanwhile, S1, S3, and S4 were selected as supplementary suppliers, allocated 5,000,000, 10,000,000, and 5,000,000 pieces. This optimal allocation resulted in a total procurement cost of USD 1,924,330. The integrated approach provides a systematic framework for supplier selection and order allocation, offering practical guidance for manufacturing firms managing multiple sourcing scenarios.