MULTI-CRITERIA SUPPLIER SELECTION: AN ELECTRE-AHP APPLICATION

Abstract

In today's highly competitive environment, an effective supplier selection process takes place a key role to reap a success of any manufacturing organization. Selecting the right supplier is always a complicated task for the companies. There are a lot of strengths and weaknesses which suppliers have. Hence this requires a careful evaluation by the firms. In general, many quantitative and qualitative factors such as quality, price, and flexibility and delivery performance must be considered to determine suitable suppliers. So evaluation procedures involve several factors so decision analysis has to be done in the multi-criteria environment. Multi-Criteria Decision Making (MCDM) techniques offer solutions to the problems involving contradictory and multiple objectives. Traditional single criteria decision making is normally dealt with one perspective, the aim is to maximize outputs or to minimize inputs. But decision-maker has to be free to include multiple factors in his/her evaluation. This study aims to select the most convenient supplier considering more than one qualitative and quantitative criteria. ELECTRE (Elimination et choix traduisant la realite) and AHP ( Analytical Hierarchy Process) have been used to evaluate the criteria. ELECTRE is a useful Multi-Criteria Decision Making that uses the outranking principle to evaluate the alternatives. Also AHP is used for determining selection criteria' weights.