Supplier selection problem with quantity discount based on AHP

Supplier selection is a multi-criteria decision making problem which includes both qualitative and quantitative factors. In order to select the best suppliers,it is necessary to make a trade-off between these tangible and intangible factors some of which may conflict. When business volume discounts exist,this problem becomes more complicated, in these circumstances,buyer should decide about two problems:which suppliers are the best and how much should be purchased from each selected supplier. In this article an integration of analytical hierarchy process and non-linear integer and multi-objective programming under some constraints is applied to determine the best suppliers and to place the optimal order quantities among them. This integration-based multi-criteria decision making methodology takes into account both qualitative and quantitative factors in supplier selection. While the analytical hierarchy process matches item characteristics with supplier characteristics,non-linear integer programming model analytically determines the best suppliers and the optimal order quantities among the determined suppliers. A practical case study illustrates its efficiency and effectiveness.