Fuzzy Optimization Model for Decision-Making in Supply Chain Management

Abstract

Choosing a supplier is a complex decision-making process that can reduce the total cost of production inputs and increase profits without increasing the price or sacrificing product quality. However, supplier selection processes usually involve multiple quantitative and qualitative criteria which increase the complexity of the problem and may decrease the accuracy and effectiveness of the process. Such complex decision-making problems can be supported by using multicriteria decision-making (MCDM) models. While there have been multiple MCDM models to support supplier selection processes in different industries and sectors, only a few are developed to support the supplier selection processes in the garment industry, especially under uncertain decision-making environment. This paper presents an integrated mathematical model under a fuzzy environment and applies it to the supplier selection process in the garment industry. In this research, the authors utilize the Buckley extension based fuzzy Analytical Hierarchical Process (FAHP) method in combination with linear normalization based fuzzy Grey Relational Analysis (F-GRA) method to develop a MCDM approach to the supplier selection process under a fuzzy environment. As a result, supplier 08 (SA08) is the optimal supplier. The contribution of this work is to propose an MCDM model for ranking potential suppliers in the garment industry under a fuzzy environment. The proposed approach can also be applied to support complex decision-making processes under a fuzzy environment in different industries.