AHP approach for supplier evaluation and selection in a steel manufacturing company
Abstract: Supplier selection
is one of the most critical activities of purchasing management in supply
chain. Supplier selection is a complex problem involving qualitative and
quantitative multi-criteria. A trade-off between these tangible and intangible
factors is essential in selecting the best supplier. The work incorporates AHP
in choosing the best suppliers. The results suggest that AHP process makes it
possible to introduce the optimum order quantities among the selected suppliers
so that the Total Value of Purchasing (TVP) becomes maximum. In this work, an
AHP-based supplier selection model is formulated and then applied to a real
case study for a steel manufacturing company in Malaysia. The use of the
proposed model indicates that it can be applied to improve and assist decision
making to resolve the supplier selection problem in choosing the optimal
supplier combination. The work represents the systematic identification of the
important criteria for supplier selection process. In addition, the results
exhibit the application of development of a multi-criteria decision model for
evaluation and selection of suppliers with proposed AHP model, which by scoring
the performance of suppliers is able to reduce the time taken to select a
vendor.
Author: Farzad Tahriri, M.
Rasid Osman, Aidy Ali, Rosnah Mohd Yusuff, Alireza Esfandiary
Journal Code: jptindustrigg080015
