Content area
Full Text
Abstract
Supplier selection is one of the most crucial activities performed by the organizations because of the key role of supplier's performance on cost, quality, delivery and service in achieving the objectives of a supply chain. Supplier selection is a multiple-criteria decision-making (MCDM) problem that is affected by several conflicting factors. Depending on the purchasing situations, criteria have varying importance and there is a need to weight criteria. Over the years a number of quantitative approaches have been applied to supplier selection problems. Although, the Analytic Hierarchy Process (AHP) and Technique for preference by similarity to ideal solution (TOPSIS) has implemented previously in supplier selection problems. But, this paper deals with an integrated decision model for selection of supplier. As aids in making supplier selection, use of decision factor analysis and ??? and TOPSIS and their comparison is proposed. The supplier selection model includes a criterion set having 18 criteria in 7 groups. For this study, a questionnaire was developed and given to 50 managers and top level managers in purchasing area of companies, asking their opinions about the various suppliers and importance of various selection criteria. The survey information is analyzed based on the suppler selection criteria. The proposed approach has the capability to handle realistic situations in changing environmental factors and provides a better decision tool for the vendor selection decision at optimum cost in a supply chain. The results indicate that the proposed decision making technique has an ability to quantify the merits and justify supplier selection.
Keywords: Supplier selection; Criteria; AHP; TOPSIS
Introduction
Contemporary companies rely on outsourcing for success in today's competitive marketplace, and selecting a vendor is now as important a process as developing new products. Thus, in the purchasing process, as a purchaser, one has many responsibilities and tasks, but the most important aspect of purchasing is selecting the correct vendor.
Products and services are selected for cost, requirements, overall quality, and stability of the supplier, time-to-market and traditional partnerships. The purchase approval process often involves more than one criteria and one opinion and requires the establishment of a broad-based team to manage the process.
Suppliers play a key role in achieving corporate competition. Hence, selecting the right suppliers is a vital component of these strategies....