Vendor selection in supply chain system: an approach using fuzzy decision and AHP

With the globalization of economic market and the development of information technology, much more information needs to be collected and processed for vendor selection, which makes it much more difficult to find right vendors. This paper, based on fuzzy decision theory and characteristics of supply chain management, proposes a comprehensive evaluation method for optimal combination selection among candidate vendors and outsourced parts. At first, some useless information is filtered by the judgment of process and production capacities. Then a hierarchical fuzzy model for vendor selection is developed. At the same time, a progressively-simplified approach is presented to deal with the order-combination optimization problem. Finally, an example is given to illustrate the effectiveness of this approach.