AHP Approach for Supplier Evaluation and Selection in a Pharmaceutical Manufacturing Firm in Ghana (original) (raw)
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Econometrics: Econometric & Statistical Methods - Special Topics eJournal, 2012
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 in their respective markets. Since a qualified supplier is a key element and a good resource for a buyer in reducing such costs, evaluation and election of the potential suppliers has become an important component of supply chain management. Most supplier selection models consider the buyer’s viewpoint and maximize only the buyer’s profit. This does not necessarily lead to an optimal situation for all the members of a supply chain. This paper deals with a brief review of the literature regarding AHP technique and its relevancy to its application in supplier selection process. Supplier selection is a complicated process. This process needs evaluation of multiple criteria and various constraints associated with them. After analysis of the results we found that for manufacturing firms, supplier relia...
Application of the Ahp in Evaluation and Selection of Suppliers
The objective of this paper is to demonstrate the application of the Analytic Hierarchy Process (AHP), a popular multicriteria decision support tool, in assessment and selection of (best) suppliers in an enterprise, namely food wholesalers. Cooperation with suppliers is an important element of quality management. One of the major problems that modern companies have is selection of the best supplier of raw materials, equipment, services, etc. Food sector was selected as particularly sensitive towards potential risks of selection of a wrong supplier. The examples of factors that influence the choice of suppliers include i.e.: price, possibility of discounts, innovativeness. These factors have been organized into hierarchical structure and evaluated by the relevant experts – representatives of food wholesalers in Poland. They indicated, using the 9-point fundamental scale, the relative importance of each factor. Such model can be used as a universal and systematic tool to evaluate supp...
Selecting the best supplier using analytic hierarchy process (AHP) method
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The purchasing function of a firm directly affects its competitive ability. Purchasing managers need to periodically evaluate the performance of suppliers in order to retain those who meet their requirements. There are various criteria for supplier selection and evaluation. This report provides a guideline for establishing supplier selection criteria for purchasing activities of University Procurement Department in accordance with some purchasing topics. The analytic hierarchy process (AHP) decision making process functions in terms of the multi-criteria analysis for cost, flexibility, quality, delivery, and variety. The present report provides an accurate and easy classification in supplier attributes that have been prioritized in the model.
Using Analytical Hierarchy Process (AHP) to Build Suppliers' Selection Model
The analytical Hierarchy process (AHP) is a multi-criteria decision making approach (MCDMA) can be used to solve complex decision problems. This study aimed to use this objective tool to build suppliers' selection model, utilizing competitive priorities "quality, cost, delivery and flexibility" as an evaluation and selection criteria. The researcher has developed an evaluation questionnaire distributed to a simple random sample of functional managers in the chemical industries sector companies enlisted in Amman Stock Exchange, the relative importance degrees were measured for main criteria "competitive priorities" from the perspective of those managers to identify their attitudes when selecting suppliers, the study concluded that the quality is the most important criterion among competitive priorities criteria for selecting and evaluating suppliers as it got a percentage of 0.53 of the general sum, followed by cost criterion that got a percentage of 0.22 so the two criteria have got 0.75 percentage. In the light of what the study has concluded, the researcher recommended the necessity of using Analytical Hierarchy Process in making decisions of selecting suppliers especially in chemical industries sector, and other industrial sectors as well, due to what this approach has of advantages and features for making complex decisions.
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International Journal of Productivity and Quality Management, 2013
Supplier selection is an important constituent in supply chain management. Supply chain management emphasises on evaluation and selection of supplier against multiple criteria rather than cost as a single criteria. Multi criterion includes both qualitative and quantitative criteria. In this paper, we have proposed analytical hierarchy process model, to evaluate and rank the potential supplier, supplying copper component (busbar), to a multinational organisation, engaged in designing, manufacturing and delivering a range of products covering various stages of power transmission and distribution system. AHP is a four step decision analysis model which converts the qualitative factor of supplier transferred into the quantitative measure reliability and a decision making method for ranking alternative course of action when multiple criteria must be considered.
TIJ's Research Journal of Economics & Business Studies - RJEBS, 2018
Selection of a supplier is a key business strategy for firms in today’s modern supply chain management. It is a strategy employed by firms with an aim of reducing purchasing costs, increasing downstream customer satisfaction, and improving competitive advantage. However, the procedure of assessing and choosing a supplier that can meet the requirements of an enterprise is a complex task, which usually involve multi-goal and multi-criteria or tangible (measurable) and intangible (immeasurable) factors. The objective of this study is to introduce a model through employment of a practical example of a textile industry in Kenya. The application of AHP approach for supplier selection does not only improve supplier selection by combining both tangible (measurable) and intangible (immeasurable) factors, but also enhances in depth analysis of essential attributes vital for supplier selection, like product quality, price, etc. The process of supplier selection is reviewed, and conclusion is d...
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.
A Fuzzy AHP approach for selecting a global supplier in pharmaceutical industry
AFRICAN JOURNAL OF BUSINESS MANAGEMENT, 2012
Our study looks into the strategy that should be pursued for raw material procurement by a pharmaceutical firm operating in Turkey. In this paper, pharmaceutical research companies and food industry chemists operating in the global market in the pharmaceutical industry are examined and a suitable supply strategy is suggested for a company operating in Turkey under the specified criteria. The supplier selection is a multi-criterion problem which includes both qualitative and quantitative criteria. This paper proposes a fuzzy analytic hierarchy process (fuzzy-AHP) to efficiently tackle both quantitative and qualitative criteria involved in selection of global supplier in pharmaceutical industry. Four main criteria and thirteen sub-criteria were identified for supplier selection in this problem. The number of suppliers to be selected under these criteria was identified as four. A numerical example presented illustrates the different selection criteria to select the best supplier in pharmaceutical industry.
The Determination of Supplier of Raw Materials using Analytical Hierarchy Process Method (AHP)
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This study aims to make a priority order of criteria in the selection of suppliers and determine which suppliers are selected. Data collection and sampling using questionnaires and purposive sampling. The data analysis method uses the Analytical Hierarchy Process to choose the best supplier as a priority based on criteria. The results showed that the quality criteria on preference, the criteria for delivery and price criteria, as second and third, respectively. Finally, based on the overall alternative weight value, supplier A has the highest value as the best supplier, followed by supplier B and C being the second and third positions.
International Journal of Services and Operations Management, 2010
This study developed a simple two-stage decision framework for evaluating suppliers of high-value and critical items with reference to a heavy engineering organisation by employing the Analytic Hierarchy Process (AHP). The first stage involved examining the qualifying criteria of the items on quality, while the second stage was concerned with identifying all other relevant attributes, including quality concerning high-value and critical items applicable to the organisation under study, and with finding out the relative importance of the same. The attributes were organised in a two-tier hierarchy showing four major criteria in the first tier and 17 subcriteria in the second tier. This enabled us to employ AHP to find out the relative importance of each individual subcriterion through pair-wise comparison between all major criteria and subcriteria by eliciting opinions from three experts. The findings indicated the quality/reliability of the items to be the most important criterion, followed by price and then technological capability of the suppliers. A group of five suppliers was evaluated on all 17 subcriteria with regard to their performance and the overall performance of the suppliers was compared on the factor scores obtained by each supplier.