Supplier evaluation and selection via Taguchi loss functions and an AHP

The purchasing function directly affects the competitive ability of a firm. Purchasing managers need to periodically evaluate supplier performance in order to retain those suppliers who meet their requirements. The importance of incorporating multiple attributes such as quality, on-time delivery, pr...

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Bibliographic Details
Published in:International journal of advanced manufacturing technology 2006-01, Vol.27 (5-6), p.625-630
Main Authors: Pi, Wei-Ning, Low, Chinyao
Format: Article
Language:English
Subjects:
Analytic hierarchy process
Decision analysis
Decision making
Mathematical analysis
Procurement management
Purchasing
Supply chains
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Summary:The purchasing function directly affects the competitive ability of a firm. Purchasing managers need to periodically evaluate supplier performance in order to retain those suppliers who meet their requirements. The importance of incorporating multiple attributes such as quality, on-time delivery, price and service, into vendor evaluation are well established in the literature. This report provides a more accurate and easier method for quantifying the supplier’s attributes to quality-loss using a Taguchi loss function, and these quality losses are also transferred into a variable for decision-making by an analytical hierarchy process (AHP). An example for supplier evaluation and selection is also presented to demonstrate the functional application of the model.
ISSN:0268-3768
1433-3015
DOI:10.1007/s00170-004-2227-z