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Although suppliers have always been an integral and critical component of materials management and manufacturing, traditionally the relationship between a company and its suppliers has been a distant one. Today in the globally competitive world of high-technology manufacturing, the need has arisen to close this gap between the company and its suppliers by integrating their business processes and thus adding to a value focus over a supply chain. This requires a mutual cooperation to share cost savings, benefits, knowledge and expertise and to understand each other's needs and capabilities, which in turn leads to single sourcing, supplier certification and long-term partnerships. However, as Quigley [2] points out, it takes a lot of work and patience to develop a partnership with suppliers, and managing suppliers and developing a relationship with them may not necessarily lead to a partnership with every supplier. Furthermore, with the widespread use of total quality management (TQM) and Just-in-Time (JIT) concepts, all companies are faced with quality assurance issues in design, manufacturing, purchasing, and delivery. JIT purchasing requires the supplier to produce and deliver to the manufacturer precisely the necessary quantity at the required time with the objective of continuous and consistent conformance to performance specifications. Thus, the performance of suppliers has become a key element in a company's quality success or failure and clearly influences the quick response ability of the company. In order to attain the goals of low cost, consistent high quality, flexibility and quick response, the process of reengineering the company activities must also include the supplier selection process. Since the supplier selection process addresses different functions within the company organization, it is a multiobjective decision problem, encompassing many tangible and intangible factors in a hierarchical manner. The evaluation of intangible factors requires the assessment of expert judgment, and the hierarchical structure requires decomposition and synthesis of these factors.
The analytic hierarchy process (AHP) provides a framework to cope with multiple criteria situations involving intuitive, rational, qualitative and quantitative aspects. It first structures the problem in the form of a hierarchy to capture the basic elements of a problem and then derives ratio scales to integrate the perceptions and purposes into a synthesis. In the hierarchical structure, all the elements in a level are pairwisely compared with...