A multi criteria decision making methodology based novel model for supplier selection

Abstract

Supplier selection and measurement of supplier performance are multi-criteria decision making (MCDM) problems and have strategic importance for all industries. The study contains analyzed factors that are affecting the process of the supply chain concerning supplier performance. Supplier performance measures is a tool to determine whether suppliers are doing their job as expected. The importance of supplier performance measurement should not be underestimated due to direct and indirect productivity-related consequences. Supplier evaluation is a complex multiple criteria decision-making problem that is affected by several conflicting factors. Therefore, the measurement of supplier performance has been becoming crucial and critical throughout the world. The purpose of this paper is to investigate the MCDM methods and propose a novel method to check how the performance of suppliers is being measured using three different methods. Qualification and final selection of the supplier can be done with a proposed novel model. In the study, the criteria are weighted with the Analytical Hierarchy Process, while TOPSIS and VIKOR methods are used to evaluate and rank the suppliers. Evaluating supplier performance, derive the importance of the main criteria and sub-criteria applied in decision-matrix to sort the suppliers according to the measurement of supplier performance criteria.