An Integrated Approach for Supplier Selection

Purchasing decisions are no longer made based on best price but companies are increasingly considering both tangible and intangible benefits that suppliers bring to the long term growth of the company. This paper addresses the multi-objective criteria pertaining to supplier selection process by a combination of Quality Function Deployment (QFD), Analytical Hierarchy Process (AHP) and Preemptive Goal Programming (PGP) techniques. QFD facilitates in blending the requirement for suppliers and supplier evaluating criteria. AHP then helps in systematically prioritizing the relative importance of the requirements enumerated as part of the QFD. Finally, PGP aids in the formulation to maximize the value proposition and to minimize the cost involved by exploiting volume discounts.