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A Fuzzy AHP Approach for Supplier Selection Problem: A Case Study in a Gear Motor Company (1311.2886v1)

Published 9 Oct 2013 in cs.AI

Abstract: Suuplier selection is one of the most important functions of a purchasing department. Since by deciding the best supplier, companies can save material costs and increase competitive advantage.However this decision becomes compilcated in case of multiple suppliers, multiple conflicting criteria, and imprecise parameters. In addition the uncertainty and vagueness of the experts' opinion is the prominent characteristic of the problem. therefore an extensively used multi criteria decision making tool Fuzzy AHP can be utilized as an approach for supplier selection problem. This paper reveals the application of Fuzzy AHP in a gear motor company determining the best supplier with respect to selected criteria. the contribution of this study is not only the application of the Fuzzy AHP methodology for supplier selection problem, but also releasing a comprehensive literature review of multi criteria decision making problems. In addition by stating the steps of Fuzzy AHP clearly and numerically, this study can be a guide of the methodology to be implemented to other multiple criteria decision making problems.

Citations (304)

Summary

  • The paper applies Fuzzy AHP (Analytic Hierarchy Process) to address the complex supplier selection problem under uncertainty, extending traditional AHP with fuzzy logic.
  • The methodology uses triangular fuzzy numbers for pairwise criteria comparisons and Buckley's method to calculate fuzzy priorities, considering factors like quality, cost, and delivery.
  • The case study in a gear motor company successfully demonstrated Fuzzy AHP's effectiveness, identifying the optimal supplier and highlighting the method's suitability for multi-criteria decisions with inherent vagueness.

An Analytical Examination of Fuzzy AHP for Supplier Selection

The paper under analysis provides an in-depth exploration of the application of the Fuzzy Analytic Hierarchy Process (F-AHP) for resolving supplier selection issues, with a specific focus on a case paper in a gear motor company. Supplier selection is a multifaceted problem due to its multiple criteria and often conflicting objectives. Decisions in this domain are crucial since they can significantly impact a company's material costs and overall competitiveness. This paper methodically demonstrates how Fuzzy AHP can be leveraged to navigate such complexities.

Key Methodological Insights

The paper discusses various methodologies for supplier selection, including Value Measurement Models like AHP and MAUT, Goal, Aspiration, and Reference Models such as Goal Programming and TOPSIS, and Outranking Methods including ELECTRE and PROMETHEE. The methodology central to this paper, however, is Fuzzy AHP, an extension of AHP incorporating fuzzy logic to handle the vagueness and uncertainty inherent in human judgement.

Fuzzy AHP represents the traditional AHP methodology extended into the fuzzy domain using fuzzy numbers instead of real numbers. This approach provides a systematic way to solve selection problems by involving triangular fuzzy numbers for pairwise criteria comparison. The paper applies Buckley's method to calculate fuzzy priorities and weights, which are then defuzzified for practical application.

Application and Results

The practical application detailed in the paper involves the selection of a supplier for a gear motor company. The decision-making criteria considered in this paper include quality, origin, cost, delivery, and after-sales services. The fuzzy AHP methodology facilitated the computation of normalized weights for each criterion and alternative, paving the way for a quantified decision basis. The result showed that among the three potential suppliers, the third supplier surfaced as the most favorable choice based on the criteria weights.

Implications and Future Directions

The application of Fuzzy AHP in this case paper reinforces the method's suitability for supplier selection tasks where uncertainty and multi-criteria considerations are pronounced. The paper also highlights how Fuzzy AHP can be designed as a replicable model for other firms facing similar decision-making challenges. Additionally, this paper opens the door for future research into hybrid models that could integrate the strengths of multiple methodologies, such as Fuzzy ANP or hybrid decision-making models, to address more complex scenarios like multi-sourcing.

Moreover, the paper hints at the potential for mathematical programming models in more complex settings, where a single sourcing approach isn't feasible, thus requiring order splitting among suppliers. Future work might explore how such models can complement Fuzzy AHP for even more robust supplier selection frameworks.

In summary, the research contributes to our understanding of decision-making in supply chain management by applying a refined methodological approach, showcasing its practicality and effectiveness within the industry context. This scholarly work thus forms a solid foundation for continued exploration and optimization in supplier selection methodologies.