Supplier Evaluation and Selection by Using the Analytic Hierarchy Process Approach

Abstract

Supplier selection is not only a process to choose the lowest price, it is a process to select the best supplier that can submit the best deal on all required criteria among other suppliers. Selecting a supplier is a complex problem involving qualitative and quantitative multi-criteria. Selecting a vendor is now as important of a process as developing new products. There is no one best way to evaluate and select suppliers; organizations use a variety of different approaches. The AHP process is one of the approaches that are used to select the right supplier. Therefore, an AHP supplier selection model is formulated and then applied to a given set of data for ABC Company. The model provides a clear way to evaluate every criterion, depending on its importance in order to select the right supplier. To reduce the time and effort in selecting a supplier, a multi-criteria decision model is used for evaluation and selection of suppliers with the proposed AHP model by scoring the performance of suppliers. Choosing the right supplier could give the right quantity and the right cost on the right timeline.