Supply chain management (SCM) is of considerable attention among the scholars and researchers. Pursuing cost reduction strategies in SCM is of utmost significance, since increasing the price is highly unlikely in the present competitive world. In this research, the authors are to find a mathematical model to demonstrate the relations among various elements of supply chain of Iran’s auto industry by applying operational research techniques. Minimizing total cost of transportation, backordering, inventory holding and idol production capacity cost is the main objective of doing this research. The model will be presented in the figure of a multi-objective decision making (MODM) mathematical model and will minimize the aforementioned costs simultaneously. In order to check the validity of the presented model, data from Saipa Industrial Group is used and Lingo Software is applied to solve the model. The results reveal that application of the presented model will minimize the above costs dramatically and will help managers to achieve their cost reduction strategies. Some suggestions are made at the end for further researches in this field.

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