Volume 2 Issue 4 pp. 801-810 Fall, 2011


A review of multi-criteria decision making techniques for supplier evaluation and selection


Prince Agarwal, Manjari Sahai, Vaibhav Mishra, Monark Bag and Vrijendra Singh
Supplier evaluation and selection has been a vital issue of strategic importance for long time. Different multi-criteria decision making (MCDM) approaches have been proposed by the researchers in past, to solve the supplier evaluation and selection problem. In this paper, we present a review of various MCDM methodologies reported in the literature for solving the supplier evaluation and selection process. The review is solely based on sixty-eight research articles, including eight review articles in the academic literature from 2000 to 2011. We try to find out the most prevalent approach in the articles and thereby present the future scope of arriving at an optimal solution to the problem, based on the specifications, the strategies and the requirements of the buyers. The study presents that with the change in processes and the requirements, how the approach of the manufacturing industry has shifted from striving for operational effectiveness to the strategic partnership in the dyadic relationship.


DOI: 10.5267/j.ijiec.2010.06.004

Keywords: Supplier selection, Supplier evaluation, MCDM, Supply chain management
References

Aamer A.M., & Sawhney R. (2004). Review of Suppliers Selection from a Production Perspective. Proc. IIE Conference, 2135-2140.

Akarte, M.M., Surendra, N.V., Ravi, B., & Rangaraj, N. (2001). Web based casting supplier evaluation using analytical hierarchy process. Journal of the Operational Research Society, 52 (5), 511–522.

Almeida A.T. (2007). Multicriteria decision model for outsourcing contracts selection based on utility function and ELECTRE method. Computers & Operations Research, 34 (12), 3569 – 3574.

Athawale V.M., Chatterjee P., & Chakraborty S. (2009). Supplier Selection using PROMETHEE method. Proc. International Conference on Advances in Mechanical Engineering, S.V. National Institute of Technology, Surat, 1009-1013.

Athawale V.M., Chatterjee P., & Chakraborty S. (2010). Supplier Selection using PROMETHEE-II method. International Journal of Manufacturing Technology and Industrial Engineering, 1(1), 95-102.

Baker, R.C., & Talluri, S. (1997). A closer look at the use of DEA for technology selection. Computers and Industrial Engineering, 32 (1), 101–108.

Bayazit, O. (2006). Use of analytic network process in vendor selection decisions. Benchmarking: An International Journal, 13 (5), 566–579.

Barla, S.B. (2003). A case study of supplier selection for lean supply by using a mathematical model. Logistics Information Management, 16 (6), 451–459.

Boer L., Labro E., & Morlacchi P. (2000). A review of methods supporting supplier selection. European Journal of Purchasing & Supply Management, 7 (2), 75-89.

Braglia, M., & Petroni, A. (2000). A quality assurance-oriented methodology for handling trade-offs in supplier selection. International Journal of Physical Distribution and Logistics Management, 30 (2), 96–111.

Büyüközkan G., & Çifçi G. (2011). A novel fuzzy multi-criteria decision frame work for sustainable supplier selection with incomplete information. Computers in Industry, 62 (2), 164–174.

Chan F.T.S., & Chan H.K. (2010). An AHP model for selection of suppliers in the fast changing fashion market. International Journal of Advanced Manufacturing Technology, 51, 1195–1207.

Chan, F.T.S. (2003). Interactive selection model for supplier selection process: An analytical hierarchy process approach. International Journal Production Research, 41 (15), 3549–3579.

Chan, F.T.S., & Chan, H.K. (2004). Development of the supplier selection model – A case study in the advanced technology industry. Proceedings of the Institution of Mechanical Engineers Part B – Journal of Engineering Manufacture, 218 (12), 1807–1824.

Chan, F.T.S., Chan, H.K., Ip, R.W.L., & Lau, H.C.W. (2007). A decision support system for supplier selection in the airline industry. Proceedings of the Institution of Mechanical Engineers Part B – Journal of Engineering Manufacture, 221 (4), 741–758.

Chang B., Chang C., & Wu C. (2011). Fuzzy DEMATEL method for developing supplier selection criteria. Expert Systems with Applications, 38, 1850–1858.

Chen, C.T., Lin, C.T., & Huang, S.F. (2006). A fuzzy approach for supplier evaluation and selection in supply chain management. International Journal of Production Economics, 102 (2), 289–301.

Choy, K.L., & Lee, W.B. (2002). A generic tool for the selection and management of supplier relationships in an outsourced manufacturing environment: The application of case based reasoning. Logistics Information Management, 15 (4), 235–253.

Choy, K.L., Lee, W.B., & Lo, V. (2002). Development of a case based intelligent customer – Supplier relationship management system. Expert Systems with Applications, 23 (3), 281–297.

Choy, K.L., & Lee, W.B. (2003). A generic supplier management tool for outsourcing manufacturing. Supply Chain Management: An International Journal, 8 (2), 140–154.

Choy, K.L., Fan, K.K.H., & Lo, V. (2003a). Development of an intelligent customer– supplier relationship management system: The application of case-based reasoning. Industrial Management and Data Systems, 103 (4), 263–274.

Choy, K.L., Lee, W.B., & Lo, V. (2003b). Design of a case based intelligent supplier relationship management system – The integration of supplier rating system and product coding system. Expert Systems with Applications, 25 (1), 87–100.

Choy, K.L., Lee, W.B., & Lo, V. (2004). An enterprise collaborative management system – A case study of supplier relationship management. The Journal of Enterprise Information Management, 17 (3), 191–207.

Choy, K.L., Lee, W.B., & Lo, V. (2005). A knowledge-based supplier intelligence retrieval system for outsource manufacturing. Knowledge-Based Systems, 18 (1), 1–17.

Cheraghi, S.H., Dadashzadeh, M., & Subramanian, M (2011). Critical success factors for supplier selection: An update. Journal of Applied Business Research, 20(2), 91-108.

Degraeve Z., Labro E., & Roodhooft F. (1991). An evaluation of vendor selection models from a total cost of ownership perspective. European Journal of Operational Research, 125 (1), 34-58.

Ding, H., Benyoucef, L., & Xie, X. (2005). A simulation optimization methodology for supplier selection problem. International Journal Computer Integrated Manufacturing, 18 (2–3), 210–224.

Forker, L.B., & Mendez, D. (2001). An analytical method for benchmarking best peer suppliers. International Journal of Operations and Production Management, 21(1–2), 195–209.

Florez-Lopez, R. (2007). Strategic supplier selection in the added-value perspective: A CI approach. Information Sciences, 177 (5), 1169–1179.

Garfamy, R.M. (2006). A data envelopment analysis approach based on total cost of ownership for supplier selection. Journal of Enterprise Information Management, 19 (6), 662–678.

Ghodsypour, S.H., & O’Brien, C. (2001). The total cost of logistics in supplier selection, under conditions of multiple sourcing, multiple criteria and capacity constraint. International Journal of Production Economics, 73 (1), 15–27.

Gencer, C., & Gürpinar, D. (2007). Analytic network process in supplier selection: A case study in an electronic firm. Applied Mathematical Modeling, 31 (11), 2475–2486.

Ho, W., Xu, X, & Dey,P.K. (2010). Multi-criteria decision making approaches for supplier evaluation and selection: A literature review. European Journal of Operational Research, 202, 16-24.

Holt G.D. (1998). Which Contractor Selection Methodology? International Journal of Project Management, 16(3), 153-164.

Hong, G.H., Park, S.C., Jang, D.S., & Rho, H.M. (2005). An effective supplier selection method for constructing a competitive supply-relationship. Expert Systems with Applications, 28 (4), 629–639.

Hou, J., & Su, D. (2007). EJB–MVC oriented supplier selection system for mass customization. Journal of Manufacturing Technology Management, 18 (1), 54–71.

Huang, S.H., & Keska, H. (2007). Comprehensive and configurable metrics for supplier selection. International Journal of Production Economics, 105 (2), 510–523.

Jiang W., & Chan F.T.S. (2011). A new fuzzy dempster MCDM method and its application in supplier selection. Expert Systems with Applications, 38(8), 9854-9861.

Kao, C. (2010). Ranking Alternatives in Multiple Criteria Decision Analysis Based on a Common-Weight DEA. Proc. International Conference on Industrial Engineering and Operations Management Dhaka, Bangladesh.

Karpak, B., Kumcu, E., & Kasuganti, R.R. (2001). Purchasing materials in the supply chain: Managing a multi-objective task. European Journal of Purchasing and Supply Management, 7 (3), 209–216.

Kumar J., & Roy N. (2011). Analytic hierarchy process (AHP) for a power transmission industry to vendor selection decisions. International Journal of Computer Applications. 12(11), 26-30.

Liu, J., Ding, F.Y., & Lall, V. (2000). Using data envelopment analysis to compare suppliers for supplier selection and performance improvement. Supply Chain Management: An International Journal, 5 (3), 143–150.

Liu, F.H.F., & Hai, H.L. (2005). The voting analytic hierarchy process method for selecting supplier. International Journal of Production Economics, 97 (3), 308–317.

Mondal, S., & Chakraborty, S. (2010). Flexible Manufacturing System Selection using Data Envelopment Analysis. Proc. International Conference on Advances in Mechanical Engineering, S.V. National Institute of Technology, Surat, 852-856.

Muralidharan, C., Anantharaman, N., & Deshmukh, S.G. (2002). A multi-criteria group decision-making model for supplier rating. Journal of Supply Chain Management, 38 (4), 22–33.

Narasimhan, R., Talluri, S., & Mendez, D. (2001). Supplier evaluation and rationalization via data envelopment analysis: An empirical examination. Journal of Supply Chain Management, 37 (3), 28–37.

Narasimhan, R., Talluri, S., & Mahapatra, S.K. (2006). Multiproduct, multi-criteria model for supplier selection with product life-cycle considerations. Decision Sciences, 37 (4), 577–603.

Ng, W.L. (2008). An efficient and simple model for multiple criteria supplier selection problem. European Journal of Operational Research, 186 (3), 1059–1067.

Rajan, A.J., Ganesh, K., & Narayanan, K.V. (2010). Application of Integer Linear Programming Model for Vendor Selection in a Two Stage Supply Chain. Proc. International Conference on Industrial Engineering and Operations Management Dhaka, Bangladesh.

Ross, A., Buffa, F.P., Dröge, C., & Carrington, D. (2006). Supplier evaluation in a dyadic relationship: An action research approach. Journal of Business Logistics, 27 (2), 75–102.

Saen, R.F. (2006). A decision model for selecting technology suppliers in the presence of nondiscretionary factors. Applied Mathematics and Computation, 181 (2), 1609–1615.

Sarkis, J., & Talluri, S. (2002). A model for strategic supplier selection. Journal of Supply Chain Management, 38 (1), 18–28.

Sarkar, A., & Mohapatra, P.K.J. (2006). Evaluation of supplier capability and performance: A method for supply base reduction. Journal of Purchasing and Supply Management, 12 (3), 148–163.

Seydel, J. (2006). Data envelopment analysis for decision support. Industrial Management and Data Systems, 106 (1), 81–95.

Songhori, M.J., Tavana, M., Azadeh, A., & Khakbaz, M.H. (2011). A supplier selection and order allocation model with multiple transportation alternatives. International Journal of Advanced Manufacturing Technology, 52(1-4), 365–376.

Talluri, S. (2002). A buyer–seller game model for selection and negotiation of purchasing bids. European Journal of Operational Research, 143 (1), 171–180.

Talluri, S., & Narasimhan, R. (2003). Vendor evaluation with performance variability: A max–min approach. European Journal of Operational Research, 146 (3), 543–552.

Talluri, S., & Narasimhan, R. (2005). A note on ‘‘a methodology for supply base optimization”. IEEE Transactions on Engineering Management, 52 (1), 130–139.

Talluri, S., Narasimhan, R., & Nair, A. (2006). Vendor performance with supply risk: A chance-constrained DEA approach. International Journal of Production Economics, 100 (2), 212–222.

Tahriri, F., Osman, M.R., Ali, A., & Yusuff, R.M. (2008). A review of supplier selection methods in manufacturing industries. Suranaree Journal of Science and Technology, 15(3), 201-208.

Talluri, S., & Baker, R.C. (2002). A multi-phase mathematical programming approach for effective supply chain design. European Journal of Operational Research, 41 (3), 544–558.

Talluri, S., & Sarkis, J. (2002). A model for performance monitoring of suppliers. International Journal of Production Research, 40 (16), 4257–4269.

Talluri, S., & Narasimhan, R. (2004). A methodology for strategic sourcing. European Journal of Operational Research, 154 (1), 236–250.

Wadhwa, V., & Ravindran, A.R. (2007). Vendor selection in outsourcing. Computers and Operations Research, 34 (12), 3725–3737.

Weber, C.A., Current, J.R., & Benton, W.C. (1991). Vendor selection criteria and methods. European Journal of Operational Research, 50 (1), 2–18.

Weber, C.A. (1996). A data envelopment analysis approach to measuring vendor performance. Supply Chain Management: An International Journal, 1(1), 28-30.

Wu, T., Shunk, D., Blackhurst, J., & Appalla, R. (2007). AIDEA: A methodology for supplier evaluation and selection in a supplier-based manufacturing environment. International Journal of Manufacturing Technology and Management, 11 (2), 174–192.

Zolghadri M., Eckert C., Zouggar S., & Girard P. (2011). Power-based Supplier Selection in product development projects. Computers in Industry, 62(5), 487-500.