Int. J.

Production Economics 242 (2021) 108315

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International Journal of Production Economics

journal homepage: www.elsevier.com/locate/ijpe

Machine learning and optimization models for supplier selection and order
allocation planning
Samiul Islam a, Saman Hassanzadeh Amin a, *, Leslie J. Wardley b
a
Department of Mechanical and Industrial Engineering, Ryerson University, ON, Canada
b
Shannon School of Business, Cape Breton University, NS, Canada

A R T I C L E I N F O A B S T R A C T

Keywords: Supplier selection and order allocation have significant roles in supply chain management. These processes
Supplier selection become major challenges when the demand is uncertain. This research presents a new two-stage solution
Order allocation approach for supplier selection and order allocation planning where a forecasting procedure is integrated with an
Optimization
optimization model. In the first stage, the demand is forecasted to handle the demand vagueness. A novel
Multi-objective
Machine learning
Relational Regressor Chain method is introduced to determine the future demand, which is compared with the
Holt’s Linear Trend and the Auto-Regressive Integrated Moving Average methods to ensure the forecasting ac­
curacy. The forecasted demand is then fed to the second stage where a multi-objective programming model is
developed to identify suitable suppliers and order quantities from each supplier. Weighted-sum and ε-constraint
methods are utilized to obtain the efficient solutions. To our knowledge, this paper is the first study that has
integrated demand forecasting with the supplier selection and order allocation planning. A real dataset from a
Canadian food supply network is used to examine the results of the forecasting methods and to determine the
orders allocated to each supplier. The results of the forecasting methods show that the proposed Relational
Regressor Chain method can forecast demand with a higher precision than the other forecasting methods
considered in this paper. It is also evident from the results that the selection of the forecasting methods may have
impact on both the selection of suppliers and the orders allocated to them.

1. Introduction The effectiveness of the supplier selection process depends on how

Supplier selection is the mechanism through which organizations
assess, classify, and determine potential suppliers to meet respective
business demands (Govindan and Sivakumar, 2016). Once an organi­
zation identifies the potential supplier, a contract is prepared between
these two parties by allocating optimum order quantity, which initiates
the supply chain. Efficient Supply Chain Management (SCM) elevates
customers’ satisfaction and helps reduce business costs (Amin and Baki,
2017). The fundamental objective of traditional supply chain manage­
ment is to minimize expenses, often regardless of environmental issues
(Amin et al., 2017). However, the growing concerns about the changes
in the environment and government legislations put extra force on
companies to adopt Green Supply Chain Management (GSCM) (Amin
et al., 2018). GSCM incorporates environment-friendly green practices,
which aims to create a balance among financial, social, and environ­
mental dimensions. The selection of green suppliers is one of the crucial
parts of GSCM (Tosarkani and Amin, 2018; Yu et al., 2020).
precisely the decision-makers evaluate the suppliers. The evaluation of
suppliers mainly focuses on product cost, product quality, delivery time,
and past performances of suppliers (Babbar and Amin, 2018; Chai and
Ngai, 2020). Based on the type of business, some other factors, such as
different risk factors, diverse safety factors, political, social, geolocation,
and economic factors can be considered during the evaluation process
(Stević et al., 2020).
The order allocation problem deals with the identification of the
optimal order from the selected suppliers considering multiple factors.
The order allocation problem usually falls under the multi-objective
decision-making problem. Each factor can be represented as an objec­
tive function, and the intentions of the objectives are either maximizing
or minimizing the factors. For modeling and solving the order allocation
problem, researchers have used some techniques such as mixed-integer
linear programming (Mohammed et al., 2019; Kaur and Sing, 2021),
mixed-integer non-linear programming (Ventura et al., 2021), and goal
programming (Jia et al., 2020; Nasr et al., 2021).

* Corresponding author.
E-mail addresses: samiul.islam@ryerson.ca (S. Islam), saman.amin@ryerson.ca, hassanzs@uwindsor.ca (S.H. Amin), Leslie_Wardley@cbu.ca (L.J. Wardley).

https://doi.org/10.1016/j.ijpe.2021.108315
Received 24 March 2021; Received in revised form 21 September 2021; Accepted 22 September 2021
Available online 24 September 2021
0925-5273/© 2021 Elsevier B.V. All rights reserved.
S. Islam et al.
Normally, several factors such as cost, capacity, and demand are
considered in the optimization models to determine the orders allocated
to each supplier. In the majority of Supplier Selection and Order Allo­
cation (SSOA) papers, the values of the demands are assumed and given
without mentioning any historical observations. These assumptions may
not always be accurate in practice. To handle this issue, the demand
values can be forecasted using Machine Learning (ML) methods. The
main advantage of using ML forecasting methods over the traditional
prediction methods is that the ML methods can produce higher accuracy
in prediction. ML methods can also handle complex and erroneous data
(Islam and Amin, 2020; Nia et al., 2021). To our knowledge, this paper is
the first study that has integrated demand forecasting using ML methods
with the supplier selection and order allocation planning.
The proposed model contains two stages. In the first stage, the de­
mand is forecasted using a novel Relational Regressor Chain (RRC)
method. The dataset used in this research is a time series data. Hence,
two other state of art time series forecasting methods, namely, Holt’s
Linear Trend (HLT) (Holt, 2004), and Auto-Regressive Integrated Mov­
ing Average (Box et al., 2015) are also included in this stage. Consid­
ering these two methods with the RRC method enables the comparison
among the forecasting errors of these models. This ensures a more stable
and accurate forecasting stage. In the second stage, we apply the values
of the forecasted demands in the proposed optimization model. In this
stage, order quantities are determined for the chosen suppliers using the
proposed multi-objective model. The proposed optimization model
comprises five objective functions including minimization of the total
cost, distance from the suppliers, defect rate, carbon emissions, and
maximization of on-time delivery. Weighted-sum and ε-constraint ap­
proaches are used for solving the multi-objective model.
The main research contributions of this work are as follow:
• Integrating “demand forecasting” and “supplier selection and order
allocation planning”. Based on our knowledge, demand forecasting
has been ignored in the other scientific papers in the supplier se­
lection and order allocation research field. Generally, other papers
have assumed that the values of the demands are available.
• Proposing a new forecasting method (i.e., Relational Regressor Chain
(RRC)) for time series data where the forecasted demand for any
specific product depends on the forecasted demand for the similar
products. Forecasting using inter products demand relationships in
supply chain management is a completely novel approach.
• Proposing a new optimization model for selecting the best suppliers
under uncertainty and to determine the orders assigned to each
supplier. Multiple products, scenarios, periods, and suppliers are
considered in the proposed optimization model.
• Solving the proposed model using two techniques (i.e., weighted-
sum and ε-constraint techniques) and finding the efficient solutions
under uncertain scenarios.
The structure of this paper is as follows. In Section 2, the literature
review is provided. Then, the problem statement is discussed in Section
3. The solution approach is provided in Section 4. Section 5 is devoted to
the discussion. Finally, conclusions are provided in Section 6.
2. Literature review
Supplier selection and order allocation problem is a prominent
research topic. Several models have been developed to address this
issue. The models can be categorized into two broad categories: a)
supplier selection models, and b) supplier selection with order allocation
models. Hence, the literature is reviewed according to these two
sections.
2.1. Supplier selection
Supplier Selection (SS) plays a vital role in the business growth. SS
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International Journal of Production Economics 242 (2021) 108315
process involves the discovery of potential suppliers, suppliers’ evalu­
ation, and setting up contracts with the suppliers. Effective supplier
selection positively impacts inventory management as well as the total
Supply Chain Management (SCM) system (Duan and Ventura, 2019). In
addition to the general supplier selection criteria, Green Supplier Se­
lection (GSS) considers some factors such as the proportion of green
materials used for the products (Papen and Amin, 2019), impacts on the
environment during the life cycle of a product (Chen, 2019), and
pollution control during production and supply processes (Cheng,
2020).
Some authors have published literature review papers about supplier
selection models and the related solution approaches (e.g., Govindan
et al., 2015; Schramm et al., 2020). Hosseini et al. (2019b) published a
literature review paper about quantitative supply chain resilience
models. They discussed the resilience supplier selection models in their
paper. Naqvi and Amin (2021) reviewed 92 papers related to the sup­
plier selection in three subcategories including literature reviews,
deterministic optimization and uncertain optimization models. They
mentioned that advanced deep learning and machine learning tech­
niques can be applied to forecast the parameters of the optimization
models as future research.
Some related papers are mentioned in this section. Dobos and
Vörösmarty (2019) proposed the Data Envelopment Analysis (DEA)
method to find supplier ranking. To recommend the suppliers for the
bike-sharing industry, Liu et al. (2019) developed the fuzzy Quality
Function Deployment (QFD) method. Some hybrid models have been
developed to solve the GSS problems, such as Decision-Making Trial and
Evaluation Laboratory (DEMATEL) and QFD combined with
Multi-Criteria Decision-Making (MCDM) (Chen et al., 2021), Analytical
Hierarchy Process (AHP) combined with MCDM (Gupta et al., 2019),
BWM combined with the VlseKriterijumska Optimizacija I Kompro­
misno Resenje (VIKOR) technique (Wu et al., 2019), and the Best Worst
Method (BWM) and fuzzy TOPSIS (Lahri et al., 2021). In addition, a
fuzzy TOPSIS method combined with a MCDM model has been proposed
by Mina et al. (2021) to find sustainable suppliers in the petrochemical
industry. Some authors have considered supplier disruption in the sup­
plier selection process, and the resilient supplier selection (e.g., Hosseini
and Al Khaled, 2019; Hosseini et al., 2020).
Machine learning techniques have been applied by some researchers
in the supplier selection process. For instance, some authors have
developed solution approaches based on neural networks to select the
best suppliers (e.g., Celebi and Bayraktar, 2008; Wu, 2009; Kuo et al.,
2010a; Kuo et al., 2010b; Azadnia at al., 2012; Kar et al., 2015). Sarkis
and Dhavale (2015) integrated Bayesian framework with the Monte
Carlo–Markov Chain simulation to rank the suppliers. In an important
research, Hosseini and Barker (2016) used Bayesian networks (BNs) as a
novel innovation to evaluate the quality of suppliers. They considered
primary, green, and resilience factors in the supplier selection process.
They mentioned that BNs can handle both quantitative and qualitative
factors in the supplier selection process. Tavana et al. (2016) proposed
an Artificial Neural Network and Multi-Layer Perceptron framework to
rank the suppliers. Cavalcante et al. (2019) used Linear Regression (LR),
Random Forest (RF), and k-Nearest Neighbour (kNN) methods for the
resilient supplier selection process, where the likelihood of disruptions
and suppliers’ performances are forecasted. Cheng et al. (2020) pro­
posed an intelligent model to evaluate the suppliers based on the support
vector regression. They assessed the performance of the model based on
a real data set. The integration of Support Vector Machine (SVM) with
the fuzzy BWM was proposed by Liou et al. (2021). The machine
learning methods in the reviewed literature have focused on the supplier
selection process. However, in this paper, both supplier selection and
order allocation are discussed. As noted in the next subsection, it is
shown that no study has considered machine learning methods in the
supplier selection and the order allocation problem.
S. Islam et al.
2.2. Supplier selection and order allocation
Apart from considering the supplier selection as a standalone prob­
lem, some researchers have focused on optimal order allocation com­
bined with the supplier selection problem and have proposed different
multi-objective mathematical models. Some of these models are cate­
gorized and presented in this sub-section.
Park et al. (2018) proposed a deterministic mathematical model
using AHP and MOILP for solving the supplier selection and order
allocation problem of the bike-sharing industry. The AHP method uses
pairwise comparisons to prioritize the selection criteria and to get the
weights of the criteria. Sometimes the pairwise comparisons lead to
inconsistency during the selection process. To address this issue, Hu
et al. (2018) utilized GA for supplier ranking, and MOMILP for order
allocation. A multi-objective mathematical model combined with Mar­
kowitz Portfolio Theory (MPT) is proposed by Kellner and Utz (2019) for
supplier selection and order allocation of the automotive industry.
Moheb-Alizadeh and Handfield (2019) developed a hybrid model
comprising MILP, BDA, and DEA techniques under a deterministic sce­
nario of the automotive industry. Wang et al. (2020) applied GA for
supplier ranking and MOMILP for order allocation with deterministic
demand.
To cope with the randomness, an MCDM technique with BWM were
developed by Cheraghalipour and Farsad (2018) for identifying the
potential suppliers of the plastic. They also calculated the order allo­
cation using MILP and RMCGP under a stochastic environment. Mohe­
b-Alizadeh and Handfield (2018) proposed an integrated multi-objective
model using DEA and MINLP techniques with stochastic demand for the
service industry. MIP and MILP have also been considered by some re­
searchers to address the SSOA problem (e.g., Nasiri et al., 2018; Hosseini
et al., 2019a; Zandieh and Aslani, 2019). However, the demand values
used in these mentioned studies are based on some assumptions.
Real-world data are mostly random and often indistinctive. Fuzzy
models are widely used to deal with this unclarity of data. Babbar and
Amin (2018) utilized a fuzzy QFD technique for supplier selection and
MOMILP for the optimal order allocation problem. Bodaghi et al. (2018)
considered the effects of the interrelationships among the selection
criteria. They proposed a Fuzzy Analytic Network Process (FANP)
combined with Fuzzy Multi-Objective Linear Programming (FMOLP) to
handle uncertain judgment scenarios during the supplier selection pro­
cess. They also proposed a Weighted-Fuzzy Multi-Objective Linear
Programming (WFMOLP) combined with AHP to determine the order
quantity from the selected suppliers. A fuzzy Decision-Making Trial and
Evaluation Laboratory (DEMATEL) method was proposed by Gören
(2018) to calculate the weights of the selection criteria. The calculated
weights have been considered as the inputs in the Taguchi Loss Func­
tions (TLF) to determine the ranks of the suppliers. The DEMATEL
method is helpful to recognize the hierarchy of the evaluation criteria
based on the importance. A bi-objective optimization model has been
proposed to figure out the order quantity. The DEMATEL method is
highly focused on important evaluation criteria. On the other hand,
TOPSIS considers the comparisons among all alternative selection
criteria.
Lo et al. (2018) developed a model using the Best-Worst Method
(BWM) combined with the Fuzzy-TOPSIS technique for the supplier
selection process. The authors proposed a Fuzzy Multi-Objective Linear
Programming (FMOLP) model to find the optimal order allocation. A
few researchers such as Mohammed et al. (2018); Alegoz and Yapicioglu
(2019); Mohammed et al. (2019) developed hybrid methods based on
fuzzy AHP and fuzzy TOPSIS. Wong (2020) proposed a Fuzzy Goal
Programming (FGP) model combined with Multiple Importance Func­
tion (FGPMIF) model. The planning for order allocation is directly
related to the future demand, and determining the order quantities from
the selected suppliers is a major challenge due to the demand volatility
(Huber and Stuckenschmidt, 2020; Nia et al., 2021; Ventura et al.,
2021). However, the values of the demand parameters used in the
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International Journal of Production Economics 242 (2021) 108315
reviewed papers are based on some assumptions. Some related papers
are categorized in Table 1.
3. Problem statement and exploratory analysis
The problem regarding supplier selection and order allocation can be
broadly categorized into three types. The first is the single sourcing for
multiple products. In this category, one manufacturer can completely
meet all consumer’s demands. However, identifying the proper order
amount for each product is a challenge. The second type is multiple
sourcing for a single product, in which there are more than one supplier
that offer the same product based on the current demands. The chal­
lenges in this category are selecting of the best suppliers and deter­
mining the orders. The third category is the multiple sourcing for
multiple products. In this scenario, more than one supplier is available
for sourcing multiple products to meet the demands of consumers. Some
questions contain: Which suppliers are selected for different products,
and what are the order quantities from the selected suppliers for
different products?
In this study, supplier selection and order allocation planning for a
Canadian food-grain company is considered. The company aims to meet
the demands of consumers of Ontario, Canada on three different types of
products namely rice, wheat flour, and rye flour for the foreseeable
future. There are 11 available suppliers for those products who are also
affiliated members of the Canadian National Millers Association
(CNMA) (CNMA, 2020) located in different geographical regions in
Ontario, Canada. Each supplier has a different production capacity
based on the size of the company. The yearly demand for each product is
not fixed, and it varies from year to year as per the yearly food con­
sumption data of Ontario. The efficiency of supplier selection and order
allocation planning highly depends on the prediction accuracy of the
demand for the three products. The accurate prediction of the demand is
a critical problem as the demand inherits different bias factors on trends
and seasonality. As an example, if the population increases in a specific
region, the demand may increase.
The company in this research is an intermediary company between
the millers and the end consumers. The company tries to predict the
demand for the three products for the incoming years, divided into four
months’ window. Based on the predicted demand, the company looks
for suitable suppliers to meet those demands, and it tries for determining
the order quantities for each product from the selected suppliers. Sup­
plier selection is a critical challenge in this part as the price is very
competitive and does not vary significantly from supplier to supplier.
Other factors like suppliers’ capacity, distance, product quality, timeli­
ness, environment-friendly product packaging carry similar importance
as the product price. Determining the order quantities is also a major
challenge as the managers must meet the demand by allocating proper
order quantities for different suppliers to minimize the total cost.
The food consumption and supply data of Canada is used in this
research. The data is collected from the Canadian Government data re­
pository (Statistics Canada, 2020). The dataset has a historical record of
consumption and supply of different food products from January 1960
to June 2020. Apart from the supply and consumptions, other features
such as ‘Beginning stocks’, ‘Production’, ‘Imports’, ‘Total disposition’,
‘Domestic disappearance’, ‘Exports’, ‘Manufacturing’, ‘Waste’ and
‘Ending stocks’ are also considered in this research. The unit values for
this dataset are in tonnes. The millers’ name, location, and capacity for
the specific products used in this research are fetched from the Canadian
National Millers Association. The missing values of the dataset are
replaced by averaging the values of the consecutive quarters. For
simplicity, the quarterly consumptions are summed up together to form
the yearly consumptions. They are presented in Fig. 1.
Fig. 1 merely represents any critical insights of the data. A correla­
tional plot in Fig. 2 is used for a better understanding of the data. Fig. 2
depicts that the consumptions of rice and wheat follow a linear uptrend
over the past 60 years whereas the consumption of rye has a declining
S. Islam et al. International Journal of Production Economics 242 (2021) 108315

Table 1
A review of supplier selection & order allocation literature.
Authors Supplier selection Order allocation Application Green Uncertainty Demand
technique technique Criteria forecasting

Babbar and Amin (2018) Fuzzy-QFD MOMILP Food/Beverage Industry ✓ Fuzzy

Bodaghi et al. (2018) FNAP, FMOLP AHP, WFMOLP Fuzzy
Cheraghalipour and Farsad (2018) MCDM, BWM MILP, RMCGP Plastic industry Stochastic
Ghadimi et al. (2018) TFN, MAS BOLP Healthcare electronic ✓ Robust
devices.
Gören (2018) Fuzzy DEMATEL, TLF Bi-objective Online retailer. ✓ Fuzzy
Moheb-Alizadeh and Handfield PCM, DEA, MINLP MINLP Automotive industry Stochastic
(2018)
Hu et al. (2018) GA MOMINLP Service industry Deterministic
Lo et al. (2018) BWM, TOPSIS FMOLP Electronic industry ✓ Fuzzy
Mohammed et al. (2018) Fuzzy AHP, Fuzzy TOPSIS MOPM Meat supply industry ✓ Fuzzy
Nasiri et al. (2018) MIP MIP Freight industry Stochastic
Park et al. (2018) MAUF, AHP, MOILP MOILP Bi-cycle industry Deterministic
Vahidi et al. (2018) Hybrid SWOT-QFD, MCDM Automotive industry ✓ Fuzzy
DEMATEL
Alegoz and Yapicioglu (2019) Fuzzy AHP, Fuzzy TOPSIS GP Service industry Fuzzy
Hosseini et al. (2019a) FCM, MP BOMIP Automobile industry Stochastic
Khoshfetrat et al. (2019) AHP, MOOM MOOM Automotive industry ✓ Robust
Kellner and Utz (2019) MOOM MOOM, MPT Automotive industry Deterministic
Mohammed et al. (2019) Fuzzy AHP, Fuzzy TOPSIS MOOM-LP Metal industry ✓ Fuzzy
Moheb-Alizadeh and Handfield MILP, BDA, DEA MILP, BDA, DEA Automotive industry Deterministic
(2019)
Petrovic and Kalata (2019) MOOM MOOM Manufacturing industry Fuzzy
Zandieh and Aslani (2019) GA-AHP MP Oil and Gas industries. Stochastic
Jia et al. (2020) GP GP Metal industry Robust
Wang et al. (2020) GA MOMINLP Service industry Deterministic
Wong (2020) FGP FGPMIF, MIP Food (Coffee) industry ✓ Fuzzy
Ventura et al. (2021) MINLP MINLP Retail industry Deterministic
Nasr et al. (2021) BWM MOMILP Garment Industry ✓ Fuzzy
Kaur and Singh (2021) Fuzzy AHP, Fuzzy TOPSIS MIP Automobile Stochastic
Proposed model RRC and SMILP RRC and SMILP Food Industry ✓ Stochastic ✓

Analytical Hierarchy Process (AHP); Benders Decomposition Algorithm (BDA); Best Worst Method (BWM); Bi-Objective Mixed Integer Programming (BOMIP); Bi-
Objective Linear Programming (BOLP); Data Envelopment Analysis (DEA); Decision Making Trial and Evaluation Laboratory (DEMATEL); Eucledian Distance
(ED); Fuzzy Analytic Network Process (FANP); Fuzzy Goal Programming (FGP); Fuzzy Goal Programming with Multiple Importance Function (FGPMIF); Fuzzy Multi-
Objective Linear Programming (FMOLP); Genetic Algorithm (GA); Linear Programming (LP); Markowitz Portfolio Theory (MPT); Mixed Integer Programming (MIP);
Mixed-Integer Linear Programming (MILP); Multi-Agent System (MAS); Multi-Attribute Utility Function (MAUF); Multi-objective Decision Trees (MODT); Multi-
objective Integer Linear Programming (MOILP); Multi-Objective Mixed-Integer Non-Linear Programming (MOMINLP); Multi-objective programming (MP); Multi-
objective Linear Programming (MLP); Multi-Criteria Decision Making (MCDM); Multi-objective Optimization Model (MOOM); Multi-Objective Mixed-Integer
Linear Programming (MOMILP); Multi-objective Programming Model (MOPM); Piecewise McCormick Envelopes (PCM); Quality Function Deployment (QFD); Revised
Multi-Choice Goal Programming (RMCGP); Relational Regressor Chains (RRC); Six Sigma quality capability analysis chart (SSQCAC); Strengths, Weaknesses, Op­
portunities and Threats (SWOT); Taguchi Loss Functions (TLF); Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS); Triangular Fuzzy Number
(TFN); Weighted Fuzzy Multi-Objective Linear Programming (WFMOLP).

Considering these data insights, this research aims to capture those re­
lationships during the demand forecasting phase.

4. Solution approach

Fig. 3 shows an overview of the proposed two-stage method for

Fig. 1. Ontario based consumptions for different products.
trend in the last 20 years. It is also observed that the wheat consumption
has strong negative relationships with the rice and rye consumptions.
This means if the wheat consumption increases in certain quarters, the
rice and rye consumptions decrease, and vice versa. The relation be­
tween the rice and rye consumptions is positive. It means that if the rice
consumption increases, the rye consumption will also increase.
solving the supplier selection and order allocation planning problem. In
the first stage, three forecasting methods are implemented for demand
forecasting. Among them, HLT and ARIMA have been recognized and
applied in supply chain management (e.g., Islam and Huda, 2019;
Gronwald 2020; Svetunkov and Boylan, 2020). A novel RRC method is
also proposed in this research to forecast the demand. The forecasting
accuracy is compared among these models based on the lowest error in
the models’ training phase. The Root Mean Square Error (RMSE) and the
Mean Absolute Percentage Error (MAPE) are considered for measuring
the errors in this paper. In this study, RMSE is chosen as one of the
metrics because it is capable to penalize large errors. In contrast, MAPE
does not rely on the value ranges of the target variables, and it focuses on
the relative percentage values. Therefore, MAPE is also considered as an
error metric in this study. The model with minimum error metrics is
selected for the demand forecasting. In the second stage, the forecasted
demands are fed in the optimization model, where two different opti­
mization techniques are considered, namely the weighted-sum method,
and the ε-constraint technique. The idea of using two different methods

4
S. Islam et al. International Journal of Production Economics 242 (2021) 108315

Fig. 2. Relational plot among rice, wheat, and rye consumptions.

HLT’s performance better than the other state of the art time series
forecasting methods (e.g., moving average, exponential smoothing, and
double moving average) (Hansun, 2016). However, the optimization of
two parameters in HLT method is complex. In addition, it may not grab
the seasonality in the data very well. The autoregression part of ARIMA
is an advantage of this method compared to the several methods in the
literature. It is noticeable that the data seasonality can be incorporated
with the ARIMA method (Tsay and Tiao, 1984). Because of the
mentioned advantages, HLT and ARIMA are applied in this research.
The common shortcoming of these two states of the art methods is
that the input data has to be stationary. In the other words, these models
do not perform well for non-stationary data (Talkhi et al., 2021). To
overcome this shortcoming, a new forecasting method (i.e., RRC) is
developed and applied in this research.

4.1.1. Holt’s Linear Trend method

Holt’s Linear Trend (HLT) method is considered as one of the de­
mand forecasting approaches in this research. Two smoothing parame­
ters including a and b are used in the HLT technique. So, the model is
also called double exponential smoothing (Hansun, 2016). The initial
values of a and b are set to 0.5. First, the level (C) and the trend (T) are
calculated separately. Then, the demand forecast ( ŷt ) at time t is made
for the specified horizon h (Liu et al., 2020). Forecasting errors are
calculated by subtracting ŷt from the actual values (yt). The squared sum
of these values is squared root to get the Root Mean Squared Error
(RMSE). The formulas are presented using Equations set (1).
√̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅
√ (
√∑ 2
Minimize = √ yt − ŷ t) (1)
t

Subject to
ŷt = Ct− 1 − h*Tt− 1
Fig. 3. The two-stage approach for solving the supplier selection and order
allocation planning problem. Ct = a * yt + (1 − a)(Ct− 1 + Tt− 1 )

in Stage 2 is related to finding different efficient solutions for the Tt = b*(Ct − Ct− 1 ) + (1 − b) Tt− 1

multi-objective model. The method that finds more efficient solutions is

chosen. a, b ≤ 1; a, b ≥ 0; and h = 5
After obtaining the optimal values for aand b, Mean Absolute Per­
4.1. Demand forecasting centage Error (MAPE) is calculated, and a linear optimization is per­
formed for the second time to find the suitable optimal values for the
In this section, three methods are discussed including Holt’s Linear smoothing parameters a and b using Equations set (2).
Trend (HLT), Auto-Regressive Integrated Moving Average (ARIMA), and
the proposed Relational Regressor Chain (RRC). The HLT method can 1 ∑|(yt − ŷ
t )|
Minimize = * *100 (2)
model the trend and the level of a time series data. These trend and level t t
yt
parameters can be smoothed using different weights which make the

5
S. Islam et al. International Journal of Production Economics 242 (2021) 108315

Subject to a, b ≤ 1; a, b ≥ 0 Table 2
Holt’s Linear Trend (HLT) method is applied for our dataset. Fig. 4 The performance of HLT methods.
shows the actual and forecasted demands of rice, wheat flour, and rye Parameters Rice Wheat flour Rye flour
flour in Ontario using the HLT method. In the prediction part, the
a 0.830025 0.466897 0.678129
probable highest demand and probable lowest demand are shown along b 0.092662 0.827789 0.168134
with the fitted demand. The probable highest demand and probable RMSE 47,030.048 174,552.3 2098.427
lowest demands are averaged to get the fitted demand which is shown MAPE 8.3559965 3.316837 6.724397
with the red line in Fig. 4. The fitted demands are considered only in the
later parts of this study.
Autocorrelation Function (ACF) is utilized to determine the order of the
Table 2 includes the values of the tuning parameters (a and b) along
Moving Average (MA), denoted by u. Then, the ARIMA model is utilized
with the error measurement values. The forecasting performance of HLT
using the defined d, r, and u values to forecast the demands of rice, wheat
method is not promising as it produces very large RMSE values shown in
flour, and rye flour with the forecasting horizon of the next eight
Table 2.
quarters. Table 3 includes the ADF stationary test results of the dataset.
The first column of Table 3 shows the stationarity assumptions under
4.1.2. Auto-Regressive Integrated Moving Average (ARIMA) method
four different scenarios. The scenario “No Constant” refers that the time
Three parameters (i.e., d, r, and u) are identified to specify the
series has zero mean whereas the “Constant Only” refers that the data
ARIMA model. The parameter d shows the data stationarity status. r
series has a non-zero mean. “Constant with Trend” scenario refers that
represents the Auto Regression (AR) order, and u shows the Moving
the data series has a deterministic trend. The last scenario (“Constant +
Average (MA) order of the ARIMA model (Tsay and Tiao, 1984). If there
Trend + Trend^2”) refers to the quadratic trend curve over time. The last
is a trend or seasonality in the data, the data is called non-stationary. For
column shows the stationarity results based on these four scenarios. The
checking the data stationarity, the Augmented Dickey-Fuller (ADF) test
stationarity results of the last two scenarios are true, which indicate the
is performed with a null hypothesis that the data is non-stationary
presence of a trend in the data. As there is a trend in the studied data,
(Fuller, 1976). The value of d parameter is set to zero (d = 0), if the
first-order differencing is performed to make it stationary, i.e., d = 1.
data is stationary. If there is a trend in the data, differencing is per­
Fig. 5 displays the predicted demands for rice, wheat flour, and rye
formed to transform the non-stationary data into stationary data. The
flour in Ontario using the ARIMA method. The prediction results depict a
differencing is done by subtracting the previous value from the current
value. After the first transformation using differencing, if the data does
not lose its trend, the second differencing is performed. This process Table 3
Stationary test results on the dataset.
continues until the data becomes stationary. The parameter d holds the
value the same, as the number of times the differencing is required to ADF Test Score P-Value C.V. Stationary?
make the data stationary. As an example, d = 2 means that two times No Constant 4.0 99.9% − 2.0 FALSE
differencing are performed to make the data stationary. After deter­ Constant Only 1.6 99.9% − 3.1 FALSE
mining the value of d, Partial Autocorrelation Function (PACF) is used to Constant + Trend − 2.0 2.3% − 1.6 TRUE
Constant + Trend + Trend^2 − 4.1 0.0% 1.6 TRUE
determine the Autoregressive (AR) order, denoted by r. Finally,
−

Fig. 4. The forecasted demand for rice, wheat flour, and rye flour in Ontario using the HLT method.

6
S. Islam et al.
Fig. 5. The forecasted demand for rice, wheat flour, and rye flour in Ontario using the ARIMA method.
steady growth in the demands of these products.
Table 4 discusses the performance of the ARIMA model for the pre­
diction of the demands. The ARIMA model has produced relatively
lower RMSE and MAPE values than the HLT method for the studied data.
Although the ARIMA model has produced a better result than the
HLT model, there is a space for improving the forecasting accuracy by
lowering the RMSE values. The low RMSE value will confirm the low
error rate in forecasting which will ensure the high forecasting perfor­
mance of the model. To achieve a low RMSE, a new method is proposed
in this study which is called a Relational Regressor Chain (RRC) method.
In this technique, the consumption relationships among similar products
are taken into account for forecasting.
4.1.3. Relational Regressor Chain (RRC)
Relational Regressor Chain (RRC) method considers the in­
terrelationships between the product consumptions for similar periods.
For example, to forecast the rice-demand for the first quarter of 2020,
the forecasted demands of wheat and rye for the same quarter are
considered. The inter products consumption relationship has been
ignored in the literature of forecasting. The HLT and ARIMA methods
used in Sections 4.1.1 and 4.1.2 do not use this relationship factor.
Considering interrelationships among similar products may boost the
forecasting accuracy. Therefore, the RRC model is developed in this
research and tested with HLT and ARIMA models’ performances.
In the RRC method, the combined relationship among rice, wheat
flour, and rye flour is considered. Suppose that the input features are
denoted as XNi for the dependent variables YNm , where i denotes the
number of input features, m shows the number of target variables, and N
denotes the total number of samples in the training data. Fig. 6 shows
the forecasting method for RRC in this paper. The RRC model’s training
process is separated into three parts. In the first part, the target variables
are predicted separately based on the available inputs. In the second
part, one of the target variables is combined with the input features, and
Table 4
Performance of the ARIMA model (d = 1, r = 1, u = 1).
Error measures Rice Wheat flour Rye flour
RMSE 733.89 2659.8 33.79
MAPE 2.75 0.86 1.99
7
International Journal of Production Economics 242 (2021) 108315
predictions are made for the other two target variables. As an example,
rice consumption is considered as an input to predict wheat and rye
consumptions. In the third part, two of the target variables are combined
with the input, and predictions are made for the third one. In addition,
wheat and rye consumptions are combined with the input to predict rice
consumptions. Predictions from all three parts are averaged (denoted by
μ) to get the final prediction.
Table 5 includes the comparisons among the three methods based on
their error measures. First, the average RMSE and MAPE for each
method are calculated. Then, the mean of the RMSE and MAPE is
calculated to get the average total error. The results show that the
ARIMA model reduces the prediction error by approximately 98.5% in
comparison to the HLT method. However, the proposed RRC model
outperforms the ARIMA model by lowering 73% of the prediction error
of ARIMA. Based on the results, the demand prediction of the RRC model
is passed to the next stage for supplier selection and order allocation.
The forecasted demands from RRC are given in Table 6.
4.2. Supplier selection and order allocation planning
The forecasted demands in Section 4.1 are utilized in this section in
the mathematical model. We develop a Stochastic Mixed-Integer Linear
Programming (SMILP) mathematical model in this part to find the
suitable supplier(s), and to determine the amounts of orders. As the costs
of the products may vary over time, the costs per Metric Tonnes (MT) of
the products are addressed using uncertain parameter. In addition, the
estimated total carbon emissions may vary based on several factors such
as the harvesting procedure, product storage method, suppliers’ dis­
tance, and transportation methods. Hence, the total carbon emissions
are considered as an uncertain parameter. These two uncertain param­
eters form a set of scenarios that are considered in the SMILP optimi­
zation model. The components of the developed optimization model are
listed as follows:
Sets:
Products, P = {1 … p … P}
Scenarios, K = {1 … k … K}
Periods, Q = {1 … q … Q}
Suppliers, S = {1 … s … S}
Parameters:
Aspq = Ordering cost related to product p and supplier s in period q.
S. Islam et al. International Journal of Production Economics 242 (2021) 108315

Fig. 6. The training phase of the relational regression chain model.

Table 5
The performance comparison among the RRC, ARIMA, and HLT methods.
Performance metric HLT ARIMA RRC

Rice Wheat Rye Rice Wheat Rye Rice Wheat Rye

RMSE 47,030.1 174,552.3 2098.5 733.9 2659.8 33.8 221.4 691.2 11.8
MAPE 8.4 3.3 6.7 2.8 0.9 1.9 0.8 0.3 0.4
Average total error 37,283 572 154

q.
Table 6
Decision Variables:
The forecasted demands using the RRC method.
βspqk = Amount of the order related to product p from supplier s and
Year Quarter Rice prediction in Wheat flour Rye flour period q in scenario k
Metric Tonnes (MT) prediction in MT prediction in MT
αpqk = Level of inventory related to product p and period q in scenario
2020 Q3-Jul 36,400 223,109 782 k
2020 Q4-Oct 36,318 223,978 911
γspq = 0 or 1 variable. It is one if the product p is received from
2021 Q1-Jan 36,711 223,743 882
2021 Q2-Apr 36,962 225,261 891
supplier s and period q. If not, it is zero.
2021 Q3-Jul 37,069 227,463 854 ∑∑∑∑ ∑∑∑
2021 Q4-Oct 36,853 229,932 933 Min δ1 = Zk Uspqk βspqk + Aspq γ spq
2022 Q1-Jan 37,398 230,016 870
s p q k s p q
∑∑∑
2022 Q2-Apr 37,505 231,733 864 + Zk Ipq αpqk (3)
p q k

Uspqk = Cost of product p (purchasing cost) from supplier s in period q Max δ2 =

∑∑∑∑
Zk Fspq βspqk (4)
in scenario k. s p q k
Bspq = Damage rate (amount of damaged product per MT) related to
∑∑∑∑
product p provided by supplier s in period q. Min δ3 = Zk Bspq βspqk (5)
Gspqk = Carbon emissions related to manufacturing product p in s p q k

period q and supplier s in scenario k. ∑∑∑∑

Jspq = Capacity related to supplier s for manufacturing product p in Min δ4 = Zk Gspqk βspqk (6)
period q. s p q k

Fspq = On-time delivery which is expressed as a percentage related to Subject to:

supplier s and product p in period q. ∑
Lpq = Demand related to product p in period q. The value of this βspqk + αp(q− 1)k − Lpq = αpqk ∀ p, q, k (7)
parameter is determined in Stage 1. s

Zk = Probability related to scenario k. It is a number between 0 and 1.

βspqk ≤ Jspq γspq ∀ s, p, q, k (8)
Ipq = Cost of inventory (holding cost) related to product p and period

8
S. Islam et al. International Journal of Production Economics 242 (2021) 108315

αpqk ≥ 0; βspqk ≥ 0 ∀ s, p, q, k (9) Table 7

Scenario-based probability distribution.

γ spq = 0 or 1 ∀ s, p, q (10) Scenario Product cost/unit Carbon emissions Probability

1 0.9Uspq 1.1Gspq 0.02

Four objective functions (δ1 , δ2 , δ3 , and δ4 ) are considered in the 2 0.9Uspq Gspq 0.17
developed optimization model. The costs of products, ordering costs, 3 0.9Uspq 0.9Gspq 0.02
and inventory costs are considered in the total cost. The total cost is 4 Uspq 1.1Gspq 0.17
minimized using Equation (3). In addition, Equation (4) maximizes the 5 Uspq Gspq 0.24
6 Uspq 0.9 Gspq 0.17
on-time delivery of the products. The third objective function in Equa­
7 1.1Uspq 1.1Gspq 0.02
tion (5) ensures the quality of the products by minimizing the damage 8 1.1Uspq Gspq 0.17
rates of the products purchased from the selected suppliers. Besides, the 9 1.1Uspq 0.9Gspq 0.02
carbon emissions during the products supply and distribution stages is
minimized using Equation (6). The constraint in Equation (7) bounds the
order quantity based on the demand and existing inventory level. e., Number 5) has a higher probability compared to the other scenarios.
Equation (8) ensures that the capacities of suppliers meet the order The data of the developed optimization model are provided in
quantities. Equations (9) and (10) represent the constraints related to Table 8. Some data are from the literature and Stage 1 of this paper. The
non-negative and binary variables, respectively. Two optimization rest of the data are from the individual supplier’s websites in Canada.
techniques, namely weighted-sum and ε-constraint techniques are uti­ The suppliers’ capacities are different for diverse products and quarters.
lized in this study to solve the developed multi-objective model. The total capacity ranges from 70,000 to 75,000 bags per quarter with
4.2.1. Weighted-sum technique. an estimated weight of one tonne per bag. In this application, the Carbon
Solving multi-objective problems produce a set of solutions instead emissions may vary for different suppliers ranging from 0.14 to 0.19
of one unique solution. These solutions are called efficient solutions tonnes per bag. The forecasted demands from Section 4.1.3 are fetched
(Deb, 2014). The weighted-sum method is considered in this study to here for all products.
find efficient solutions. In this method, all objective functions (i.e., δ1 , The supplier selection and order allocation problem of this study is
δ2 , δ3 , and δ4 ) are aggregated to form a single objective function (i.e., solved using the GAMS software. This software can solve mixed-integer
δ5 ). To this aim, each objective function is multiplied by a weight. These linear programming models effectively. Table 9 includes the weighted-
scalarized objectives are added together to form a single objective sum method’s efficient solutions. 8 efficient solutions have been found
(Kaddani et al., 2017; Guo et al., 2019). In this investigation, the sca­ by changing the values of the weights, and trying different combina­
larized single objective function is defined as in Equation (11) where w1 , tions. In addition, the ε-constraint method’s efficient solutions are
w2 , w3 , and w4 are the weights of the objective functions, and g is the written in Table 10. Again, 8 efficient solutions have been identified for
objective index. this method according to the diverse values of ε. Each technique has its
own pros and cons. For instance, the weighted-sum method is simple to
Min δ5 = w1 δ1 − w2 δ2 + w3 δ3 + w4 δ4 (11) implement, but it is only good for convex sets. Whereas, the ε-constraint
Subject to: method can handle both concave and convex sets efficiently (Marler and
Arora, 2004; Deb and Tiwari, 2008). The efficient solutions of Tables 9
Equations 7–10
∑ and 10 are provided to the decision-makers.
wg = 1 (12)
g 5. Discussion and managerial insights

wg ≥ 0 (13) In this section, the results of the supplier selection and order allo­
cation model are analyzed and discussed. The data used in this paper is a
4.2.1. ε-constraint technique time series data. Thus, this research falls under the time series fore­
In this study, the problem is also solved by ε-constraint method. This casting problem. As the target variable in this research is numeric, the
method can handle both convex and non-convex problems. ε-constraint demand prediction is related to the regression problem (Žegklitz and
method tries to find efficient solutions by solving one objective function Pošík, 2019). This section is divided into two parts. In the first part, the
(the most important one) from the multi-objective problem. The other performance of the proposed RRC method is compared with two
objective functions are used as the constraints (Yang et al., 2019). In this state-of-art time series methods namely ARIMA and HLT. In the second
study, δ1 is considered as the main objective function (δ6 ) because of the part, the forecasting effectiveness of the RRC method is compared with
importance of cost. The rest of the objective functions are defined as the two advanced regression methods, namely Support Vector Regression
constraints of the main objective, as shown in Equations 14–17. The
values of constraint bounds (i.e., ε1 , ε2 , and ε3 in this case) are changed,
and different efficient solutions are found. Table 8
The data related to the developed optimization model.
Min δ6 = δ1 (14)
Aspq = $1 Ipq = $1
Subject to: Us1q = $9.98 (s = 1, Gspq = 0.14 tonnes (s = J11q = 9500; J12q = 60,000; J13q
2, 4) 1, 3, 4, 6, 7), = 500;
Equations 7–10 Us1q = $10.55 (s = G2pq = G5pq = 0.19 J21q = 9800; J22q = 65,000;
3, 5, 6, 7) tonnes
δ2 ≥ ε1 (15)
Us2q = $2.56 (s = 2, Fspq = 0.93 (s = 3, 7), J23q = J52q = J72q = 200;
3, 6)
δ3 ≤ ε2 (16) Us2q = $2.78 (s = 1, Fspq = 0.90 (s = 1), J31q = 8500; J32q = J62q =
4, 5, 7) 64,200; J33q = J63q = 300;
δ4 ≤ ε3 (17) Us3q = $5.99 (s = 1, Fspq = 0.82 (s = 2, 4, 5, J41q = 8600; J42q = 61,000; J43q
5, 6) 6) = 400;
Table 7 includes information related to the scenarios. Product cost Us3q = $6.13 (s = 2, Bspq = 0.12 (s = 1, 4, 5, J51q = J71q = 9300; J52q = J72q =
and Carbon emissions may remain the same, or decrease or increase by 3, 4, 7) 6), 60,500;
10%. Therefore, there are nine scenarios in this table. In addition, the Bspq = 0.19 (s = 2, 3, 7)
Lpq are obtained from J61q = 5500
probability of every scenario is shown in the table. The main scenario (i.
Stage 1.

9
S. Islam et al. International Journal of Production Economics 242 (2021) 108315

Table 9 (Sabzekar and Hasheminejad, 2021). The data in this research starts
Weighted-sum method’s efficient solutions. from the year 1960, and the values of demands shifted over time, which
w1 w2 w3 w4 δ1 δ2 δ3 δ4 can be the cause of the down performance of SVR. Meanwhile, PR per­
formed better than SVR for large data points as it focuses on non-linear
0.25 0.25 0.25 0.25 3,827,100 904,537 165,306 160,267
relational points, similar to the claim of another recent research
0.1 0.03 0.02 0.85 3,880,253 927,937 158,663 148,349
0.75 0.15 0.05 0.05 3,822,635 906,426 175,443 161,406 (Dharani et al., 2021). The proposed RRC method outperformed both PR
0.4 0.3 0.2 0.1 3,822,635 902,751 166,869 161,406 and SVR. In comparison with PR, RRC decreases the average total error
0.3 0.2 0.3 0.2 3,822,635 902,751 166,869 161,406 by 59.1%. In addition, RRC reduces the error by 77.82% comparing with
0.2 0.6 0.1 0.1 3,897,274 937,380 165,711 148,392 SVR.
0.01 0.02 0.95 0.02 3,950,295 880,077 126,549 156,811
0.05 0.05 0.75 0.15 3,950,335 880,077 126,549 156,796
For Quarter 3, 2020, the order quantities for rice from the suppliers
are presented in Table 14. These numbers reflect how the forecasting
methods affect the supplier selection process along with the order
(SVR) and Polynomial Regression (PR). quantities. For RRC and PR methods, four suppliers are selected. How­
ever, five suppliers are selected for the SVR method. The order quantities
5.1. Comparison of RRC with two time series forecasting methods are also different among the selected suppliers.
The proposed research and related findings can assist supply chain
In this section, the results of the proposed RRC method with the HLT managers in reconfiguring their traditional supplier selection and order
method, and the ARIMA method are compared to observe how the allocation processes to catch up with the new trends of the industries.
selected suppliers are affected. For instance, the selected suppliers and The proposed RRC method in the integrated forecasting framework can
the respective order amounts of the product ‘rice’ for Quarter three (Q3) help the supply chain managers to determine future demand precisely.
based on the weighted-sum method (equal weights) are shown in The framework proposed in this research can be used by the company as
Table 11. Four suppliers are selected based on the prediction of the RRC a decision tool to facilitate decision-making authorities by evaluating
method and the ARIMA method. However, the predictions of the HLT suppliers depending on their environmentally friendly production sys­
method require five suppliers for the same quarter, under the same tems and some other evaluation criteria (e.g., cost, distance, defect rate).
scenario. These results illustrate that the selection of the forecasting The proposed optimization model can also aid managers in developing
methods may have effect on both the selection of suppliers and the or­ suitable order quantity policies from multiple sources under stochastic
ders allocated to them. scenarios.
It is observed that the significant changes in the demand values can
cause changes in the selected suppliers as well as the order allocation. 6. Conclusions
Selection of different suppliers in those cases is due to the limited ca­
pacities of the suppliers. This observation shows that the values of the Supplier selection and order allocation planning for a future time­
demand parameter play important roles in the supplier selection and frame is a complex problem in practice. Demand prediction is necessary
order allocation planning. for order allocation and for the overall planning process. The uncer­
tainty in the values of some parameters such as demand can have
5.2. Comparison of RRC with two regression methods negative impacts on the results. Forecasting of the uncertain parameters
with high accuracy can reduce the negative effects on the supplier se­
In this section, the forecasted results of RRC are compared with the lection and order allocation planning. This paper introduces an
forecasted results of two superior machine learning regression methods. approach to resolve the SSOA planning problem.
The first regression method is Polynomial Regression (PR). This method
was chosen because it can fit data better than Linear Regression (LR)
(Bruno et al., 2018). In addition, PR is able to capture the relationships Table 11
between the input features and the targeted outputs (Bera et al., 2021). Supplier selection and order allocation comparison based on the three different
Support Vector Regression (SVR) is used as another regression method in prediction methods based on the weighed-sum method (equal weights).
this part of the analysis. SVR is widely adopted by many researchers as it Suppliers (the base scenario, k = The selected suppliers and order amounts for
can handle both linear and non-linear data (Liu et al., 2021). SVR covers 5) rice in Quarter 3, 2020 (Q3)

maximum data points based on the threshold value within SVR’s RRC HLT ARIMA
boundary which leads to high prediction accuracy (Sabzekar and method method method
Hasheminejad, 2021). Table 12 includes the forecasted demands for Supplier 1 9500 9500 9500
rice, wheat, and rye flour using PR and SVR for the eight quarters. Supplier 2 9800 9800 9800
Table 13 includes the comparison of the forecasting errors among Supplier 3 8500 8500 –
Supplier 4 8600 8600 8600
RRC, PR, and SVR based on RMSE and MAPE. The results reflect that Supplier 5 – – –
SVR has not performed well in this case, and most probably the cause is Supplier 6 – – –
the large number of data points. SVR considers only the data points Supplier 7 – 232 8725
within its boundary, and the other data points are assumed as outliers

Table 10
ε-constraint method’s efficient solutions.
ε1 ε2 ε3 δ1 δ2 δ3 δ4

910,500 658,945 526,315 3,830,159 910,500 177,149 160,759

1,718,760 315,345 317,430 9,581,662 1,718,760 300,080 307,880
1,385,270 306,564 306,444 6,341,674 1,385,270 248,324 242,240
1,077,550 236,564 276,444 4,513,650 1,077,550 197,949 182,977
910,500 628,945 496,315 3,830,159 910,500 177,149 160,759
1,385,270 306,564 306,444 6,341,674 1,385,270 248,324 242,240
1,597,550 728,345 747,930 7,982,956 1,597,550 281,654 283,954
1,718,760 728,345 747,930 9,581,662 1,718,760 300,080 307,880

10
S. Islam et al. International Journal of Production Economics 242 (2021) 108315

Table 12
The forecasted demands using PR and SVR methods.
Year Quarter Prediction using Polynomial Regression (PR) Prediction using Support Vector Regression (SVR)

Rice in MT Wheat flour in MT Rye flour in MT Rice in MT Wheat flour in MT Rye flour in MT

2020 Q3-Jul 36,672 223,958 842 37,322 224,073 901

2020 Q4-Oct 36,891 224,174 967 37,336 224,295 997
2021 Q1-Jan 37,151 224,252 924 37,363 224,483 989
2021 Q2-Apr 37,537 225,993 963 37,642 226,149 981
2021 Q3-Jul 37,656 227,689 926 37,796 228,008 998
2021 Q4-Oct 37,633 230,196 964 37,799 230,549 973
2022 Q1-Jan 37,992 230,749 921 38,169 230,917 955
2022 Q2-Apr 38,084 232,425 911 38,298 232,796 957

Table 13
The performance comparison among PR, SVR, and RRC methods.
Performance metric PR SVR RRC

Rice Wheat Rye Rice Wheat Rye Rice Wheat Rye

RMSE 962.1 1265.3 28.3 1183.9 2894.5 68.5 221.4 691.2 11.8
MAPE 4.2 2.1 1.7 7.8 16.4 4.4 0.8 0.3 0.4
Average total error 377.3 695.9 154.3

allocation planning. It is valuable to have more comprehensive models

Table 14
in the future including more forecasted factors such as cost in addition to
Supplier selection and order allocation comparison based on the three different
the forecasted demand. In addition, new multi-objective algorithms can
prediction methods according to the weighed-sum method (equal weights).
be developed and applied for solving this problem, particularly when the
Suppliers (the base scenario, k = 5) The selected suppliers and order amounts for size of the problem is large.
rice in Quarter 3, 2020 (Q3)

RRC method PR method SVR method Acknowledgments

Supplier 1 9500 9500 9500
Supplier 2 9800 9800 9800 The authors would like to thank the editor and reviewers for the
Supplier 3 8500 122
–
comments that improved this paper. This research has been supported
Supplier 4 8600 8600 8600
Supplier 5 – – – by a grant from the Faculty of Engineering and Architectural Science,
Supplier 6 – – – Ryerson University, and an Insight Development Grant from the Social
Supplier 7 – 8772 9300 Sciences and Humanities Research Council (SSHRC) of Canada.

In this research, two stages have been considered for supplier se­
lection and order allocation planning. In Stage 1, two methods including
Holt’s Linear Trend and Auto-Regressive Integrated Moving Average
techniques have been applied to forecast the future values of the de­
mands based on a real dataset in the Canadian food industry. In addition,
a new forecasting method (i.e., RRC) has been proposed in this paper.
Using this method, the interrelationships among different products are
considered during the forecasting process. Comparing the performances
of these three methods has shown the effectiveness of the proposed RRC
method. The proposed RRC method lowers the forecasting errors by
98.5% and 73% for HLT and ARIMA, respectively. The results of Stage 1
include the future values of the demands. In Stage 2, a novel multi-
objective stochastic (scenario-based) optimization model has been
developed to determine the suppliers and the related orders. The results
of Stage 1 have been utilized in this stage. Four objectives including
minimization of the total cost, maximization of the on-time delivery,
minimization of the damage rates, and minimization of the carbon
emissions have been considered. The uncertainty in the product cost and
carbon emissions have been considered as a novel innovation in the
optimization model. The multi-objective model has been solved by two
methods including weighted-sum and ε-constraint approaches, and the
efficient solutions have been found. The results show that the selection
of the forecasting methods may have effect on both the selection of
suppliers and the orders assigned to them. In addition, the results show
that the proposed RRC method outperforms SVR and PR methods with
reductions in forecasting errors by 77.82% and 59.1%, respectively.
There are some future research directions. In this paper, demand
forecasting has been integrated with the supplier selection and order
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