Research on the supplier selection of a supply chain based on entropy weight and improved ELECTRE-III method

Abstract

On the background of economic globalisation, market competition is no longer the competition between enterprises, but it is the competition between supply chains. Supplier selection is the basis of supply chain cooperation, and is also the key factor to improve the competitive power of a supply chain. A novel method, which combines entropy weight and an improved ELECTRE-III method, is proposed to deal with supplier selection of supply chains. The research states at home and abroad are firstly analysed, and on the foundation of the relative literature, the indicator systems are constructed and the corresponding objective weight of each indicator based on entropy is calculated. Then the threshold is confirmed and the harmoniousness index and the unharmoniousness index are calculated. Next, the outranking relation is calculated and evaluated. Last, the suppliers are ranked based on the net advantage value of each project. Finally, the case analysis proves that the process of this method is clear and the application of it is convenient.

Keywords:

• supply chain
• entropy weight
• ELECTRE-III
• outranking relation

Acknowledgment

This paper is supported by the Humanities and Social Sciences Research Project of the Ministry of Education of China (No. 09YJA630088), and the Natural Science Foundation of Shandong Province (No. ZR2009HL022).