A supplier selection model: a comparison of fuzzy logic and the analytic hierarchy process

Abstract

This paper aims to compare two tools for decision makers that intend to support the decision of the selection of the appropriate supplier. Suppliers are crucial to both the efficiency and effectiveness of the performance of companies. A critical success factor of these companies is the selection of the appropriate supplier. A methodology is proposed to optimise the evaluation process based on different criteria. The proposed approach extends the one proposed by Ordoobadi (2009, Development of a supplier selection model using fuzzy logic. Supply Chain Management: An International Journal, 14 (4), 314–327) who proposed the application of fuzzy logic (FL) where we use the same example case study in order to compare the analytic hierarch process (AHP) with FL. In this paper we demonstrate how we can achieve the same objective of expressing human assessments in the form of linguistic expressions by using AHP. Moreover, we demonstrate the capability to run a sensitivity analysis which helps to understand the causal relationships among the different factors. We demonstrate how this capability can help us to explain and predict the different relationships among criteria and alternatives. Moreover, we provide a measure that is able to capture the consistency of the decision maker's preferences. In our approach we provide a single unit of scale that is not only capable of ranking suppliers but also provides an understanding of the difference in scale between different suppliers which can then help to allocate resources accordingly. These facilities are not offered by Ordoobadi (2009). The proposed approach here can help companies to identify the best supplier in changing environments. The paper describes a decision model that incorporates a decision maker's subjective assessments and applies a multiple criteria decision making technique to manipulate and quantify these assessments. Unlike many similar studies, two techniques have been performed on the same case study in order to improve our understanding of the differences in the proposed techniques.

Keywords:

• supply chain management
• supplier selection
• analytic hierarchy process
• fuzzy logic

Acknowledgement

The author is grateful to the reviewers for the valuable feedback comments received.