Supplier selection problem: A fuzzy multicriteria approach

Abstract

The purpose of this paper is to suggest a fuzzy multi-criteria approach to solve the supplier selection problem, an approach based on the fuzzy analytic hierarchy process and imprecise goal programming. To deal with decision-maker (DM) preferences, the concept of satisfaction function is introduced. The proposed approach is applied to a real case, a Tunisian company, in which the DM considers several confl icting objectives simultaneously: maximising the total value of purchases, minimising the total cost of the product, minimising the total number of defective products and minimising the total number of units delivered late. Using a multi-objective mathematical model and LINDO software, the results show that the proposed approach is very useful for selecting the best supplier and fulfi lling DM preferences.

Keywords: Supplier selection, multi-criteria decision-making, fuzzy logic, satisfaction function, imprecise goal programming (IGP), fuzzy analytic hierarchy process (FAHP).