An integrated approach for supplier selection and purchasing decisions (original) (raw)
Related papers
International Journal of Advanced Operations Management, 2017
A good supplier is a key resource for an organisation in reducing costs, improving productivity and quality of the product. Hence, selection of potential suppliers has become an important task of supply chain management. Traditionally, procurement is considered as buying the material at cheapest price and maximizes the buyer's profit. But this does not necessarily lead to an optimal situation for all members of a supply chain. This paper attempts to propose an analytical framework for supplier evaluation and selection using analytical hierarchy process (AHP) and linear programming problem (LPP). Supplier selection process includes evaluation of multiple criteria and various constraints associated with them. A case of auto parts manufacturing firm is analysed. After analysing the case, the suppliers were ranked based on their performance using AHP technique and LPP is then adopted to determine the optimum quantity to be procured from each of the best ranked supplier.
Hybrid analytical hierarchy process model for supplier selection
Industrial Management & Data Systems, 2008
Purpose -This paper aims to propose a new approach called "analytical hierarchy process weighted fuzzy linear programming model (AHP-FLP)" for supplier selection. Design/methodology/approach -A hybrid method of supplier selection, AHP-FLP is applied to a real industry case. The weights of the various criteria, taken as local weights from a given judgment matrix, are calculated using analytical hierarchy process (AHP) that are also considered as the weights of the fuzzy linear programming model. This new model is compared with the classical AHP method. Findings -This study concluded that the AHP-FLP method outperforms the AHP method for supplier selection with respect to restricted supplier selection criteria. Drawing on a real case, Supplier 1 was identified to be the best supplier through the AHP model under no restrictions, which contradicts the finding that Supplier 2 was selected as the best supplier by the AHP-FLP model subject to constraints. Research limitations/implications -More research is definitely called for within the context of studying a more complex supply chain with multiple supply network and nodes. There is also a crucial need for investigating other hybrid methods to find the optimum supplier. Practical implications -The findings of this study indicate that the weights of supplier selection criteria calculated by the AHP-FLP model are in line with the actual supplier selection decision of purchasing managers. Since the AHP-FLP model is relatively more difficult to implement compared with the crisp AHP, its application will be more appropriate for high-value components where stringent purchasing criteria are required. In contrast, AHP remains an appropriate approach for relatively lower value components (C class). Originality/value -The novelty of this study lies in the application of a hybrid approach to a real industry case. This study has dealt with one of the most important subjects in supply chain management, providing a better decision for supplier selection using appropriate quantitative techniques.
Supplier selection: a proposed framework for decision making
International Journal of Procurement Management, 2018
This article presents and performs a preliminary validation of a framework for supplier selection. It makes use of, in sequence, Kraljic’s supplier relationship portfolio and the multi-criteria decision tool named the analytic hierarchy process (AHP). The proposal’s main objective is to provide companies with a practical and easy-to-use tool for classifying the importance and criticality of raw materials and for selecting suppliers based on a hierarchy. One result of this action-based study is the preliminary validation of the proposed model through its application in an electronics company. The application of the method suggests an improvement in the company’s supplierselection practices related to one key item of one of its products.
Advances in Intelligent Systems and Computing, 2016
Supplier evaluation and selection is recognized as a multiple criteria problem. Having considerable economic impact and influencing a competitive position of a buyer, supplier selection has been modelled by different multiple criteria decision analysis approaches. This case study focuses on the reported "relevance gap" between theoretical approaches to the supplier selection problem and practice. The research was conducted in a textile group, addressing a typical buying situation of a main raw material. The decision process was structured with weighted score, AHP and goal programming models. Three models elaborated have led to the very similar output, recognized as realistic and consistent by the decision makers. Acquired skills of multiple criteria decision analysis were considered as beneficial for supplier selection decisions.
Modeling and development of a decision support system for supplier selection in the process industry
This paper presents the development of a model based decision support system with a case study on solving the supplier selection problem in a chemical processing industry. For the evaluation and selection of supplier, the analytical hierarchy process (AHP) and grey relational analysis (GRA) were used. The intention of the study is to propose an appropriate platform for process industries in selecting suppliers, which was tested with an electroplating industry during the course of development. The sensitivity analysis was performed in order to improve the robustness of the results with regard to the relative importance of the evaluation criteria and the parameters of the evaluation process. Finally, a practical implementation study was carried out to reveal the procedure of the proposed system and identify the suitable supplier with detailed discussions about the benefits and limitations.
Ahp Based Methodologies for Suppliers Selection: A Critical Review
Proceedings of the International Symposium on the Analytic Hierarchy Process
The Supplier Selection Problem (SSP) consists of analyzing and measuring the performance of a set of suppliers in order to rank and select them with the general objective of improving the competitiveness of the entire supply system. Since many factors should be taken into account, very often conflicting each other, the problem can be tackled using multi-criteria approach. A survey of the scientific literature highlights that the most used methodology is the Analytical Hierarchy Process (AHP) with its variants. In this paper a careful scrutiny of the papers appeared on international scientific journals in the recent years on the SSP is provided. In particular the analysis focuses on the use of AHP and its variants to solve different aspects of the problem. The results of the study allow individuating opportunities and open issues arising by the use of multi-criteria approaches, with particular reference to AHP-based models, to model the SSP.
Designing a computational tool for supplier selection using analytical hierarchy process
With increasingly competitive global world markets, companies are under intense pressure to find ways to cut production and material costs to survive and sustain their competitive position. Since a qualified supplier is a key element and a good resource for a buyer in reducing such costs at optimum material quality, evaluation and selection of the right suppliers is critical to maintain competitiveness. This decision becomes more complicated in case of multiple suppliers, multiple conflicting criteria, and imprecise parameters. Most supplier selection models consider the buyer’s viewpoints and maximise only the buyer’s advantages and thus do not necessarily lead to an optimal situation for business competitiveness. This paper deals with a multi attribute decision model using AHP for the justification of supplier selection, explore the factors influencing the supplier selection, the relationship between the identified factors and the firm’s performance with reference to manufacturing industries in Bhubaneswar City.
Supplier's Selection Model based on an Empirical Study
Procedia Technology, 2012
The problem of selecting suppliers/partners is a crucial and important part in the process of decision making for companies that intend to perform competitively in their area of activity. The selection of supplier/partner is a time and resource-consuming task that involves data collection and a careful analysis of the factors that can positively or negatively influence the choice. Nevertheless it is a critical process that affects significantly the operational performance of each company. In this work, there were identified five broad selection criteria: Quality, Financial, Synergies, Cost, and Production System. Within these criteria, it was also included five sub-criteria. After the identification criteria, a survey was elaborated and companies were contacted in order to understand which factors have more weight in their decisions to choose the partners. Interpreted the results and processed the data, it was adopted a model of linear weighting to reflect the importance of each factor. The model has a hierarchical structure and can be applied with the Analytic Hierarchy Process (AHP) method or Value Analysis. The goal of the paper it's to supply a selection reference model that can represent an orientation/pattern for a decision making on the suppliers/partners selection process
Selection of Suppliers through Different Multi-Criteria Decision Making Techniques
Abstracts -The main objective of the paper is to provide different multi-criteria decision making approach and to clarify the similarities and dissimilarities, advantages and disadvantages of the method in order to select the better supplier selection approach. An important problem in decision analysis is the evaluation of the difference between two or more different rankings for a set of alternatives. Since a qualified supplier is a key element and a good resource for a buyer in reducing such costs, evaluation and selection of the potential suppliers has become an important component of supply chain management. In this paper some multi-criteria decision making techniques such as Linear weighted method, Categorical method, Fuzzy approach, Analytical Hierarchical process (AHP)are discussed with example. The aim of this article is to understand the strategic operating decision area of the supplier selection process and to aid decision makers with varying degrees of importance to reach consensus in rating alternative suppliers.
Efficient supplier selection - a three-stage multi-criteria decision-making approach
International Journal of Logistics Systems and Management, 2019
The qualitative and quantitative factors influence the supplier selection problem. The selection of an efficient supplier is a difficult task and is a multi-criteria decision-making problem. In the present study, a three-stage analytic hierarchy process (AHP)-technique for order preference by similarity to ideal solution (TOPSIS)-goal programming (GP) was employed for the evaluation and selection of suppliers. AHP was used for identifying relative weight of the selection criteria then these weights were taken as input for TOPSIS methodology for ranking the shortlisted suppliers. GP was used for the quantity allocation. This study is intended to guide the organisational managers in formulating the effective policies and strategies for the effective supplier selection process in the competitive environment.