Multi-criteria decision making for supplier selection using fuzzy AHP approach

Abstract

Purpose – The purpose of this paper is to propose a multi-criteria supplier selection model using fuzzy analytical hierarchy process (FAHP) approach for a leading automobile company in India. Design/methodology/approach – FAHP approach followed by a sensitivity analysis has been used. Findings – In this study, a FAHP-based supplier selection model is proposed to provide useful insights in choosing appropriate suppliers in dynamic situations in order to enhance long-term relationship with them. Practical implications – This study proposes a supplier selection model for an automobile industry which often faces heterogeneous supply environments. This model may have a high acceptability where a large number of suppliers are available to supply the materials or provide the services. As analytic hierarchy process is the most widely used methodology for supplier selection, however, it becomes less efficient in case of inconsistencies observed in the data. However a FAHP-based approach may overcome this difficulty. Originality/value – It contributes to supplier selection process and points out the importance of supplier selection problem, especially in the context of multi-criteria decision-making in Indian scenario.