A bi-level programming model for supplier selection in constructing logistics service supply chain

In order to reduce the subcontract cost and improve service quality gradually in constructing logistics service supply chain, a bi-level programming model to describe the game relationship between integrated logistics service supplier and subcontract supplier is put forward, its upper-level objective function is to determine subcontract total cost which should be minimized, its lower-level objective function is subcontract supplier's total service quality which should be maximized. A criterion on measuring subcontract supplier's service quality was presented as "synthetically expressive degree(SED)". Then true influencing factors and their weights were gained by reducing all influencing factors based on fuzzy-rough set. According to true influencing factors' weights, we can calculate synthetically expressive degree of each subcontract supplier. A genetic algorithm to solve model was proposed, a rule of dealing with constraints and lower-level objective function were designed and applied to the genetic algorithm. Finally, a simple simulation application was illustrated; the result indicates the method is good at inspiriting subcontract supplier to cut down price and improved service quality at the same time.