A hybrid decision making method for supplier selection

Abstract

This study proposes a hybrid decision making method for the supplier selection problem in presence of multiple objectives and constraints. The proposed technique, considered as a Multi-Criteria Decision Making (MCDM) method, consists of three stages. In the first stage, selection criteria are compiled through procurement experts' suggestions and literature surveys. Modified Fuzzy Data Envelopment Analysis Method (MFDEA) in the Analytic Hierarchy Process (AHP) is employed to determine weights of these criteria in the second stage. Finally, alternative suppliers' evaluations relative to these criteria are obtained using Fuzzy Multi-Objective Linear Programming (FMOLP) Method integrated with the criteria weights calculated previously. The proposed method is illustrated with three different applications in building materials supplier companies. This study suggests a way of combining results of MFDEA Method in the AHP with FMOLP Method through the experts' linguistic evaluations. This hybrid approach offers flexibility and simplicity in the model structure and analysis. More specifically, the promising characteristics of the methodology are incorporating uncertainties in the supplier selection, forming a simple linear model structure, and accommodating single and multiple sourcing problems with multiple criteria.