ANALYTIC NETWORK PROCESS FOR MANUFACTURING SUPPLIER SELECTION

The supplier selection process (SSP) for manufacturing firms plays an important role in directly reducing cost on the bottom line. An article presents an analytic network process (ANP), which is a proven methodology for solving complex and systemic decisions. ANP is an attractive multi-criteria deci...

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Bibliographic Details
Published in:Cost management 2010-01, Vol.24 (1), p.18
Main Authors: Chakraborty, Partha Sarathi, Majumder, Gautam, Sarkar, Bijan
Format: Magazinearticle
Language:English
Subjects:
Case studies
Data envelopment analysis
Decision analysis
Decision making
Dimensional analysis
Feedback
Flexibility
Hierarchies
Linear programming
Management accounting
Manufacturers
Manufacturing
Product life cycle
Suppliers
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Summary:The supplier selection process (SSP) for manufacturing firms plays an important role in directly reducing cost on the bottom line. An article presents an analytic network process (ANP), which is a proven methodology for solving complex and systemic decisions. ANP is an attractive multi-criteria decision making tool because it allows for the consideration of interdependencies among and between levels of supplier attributes. The case study presented here demonstrates the use of ANP for SSP. ANP involves representing manufacturer/ supplier relationships hierarchically, but does not require a strict hierarchical structure, as does AHP, and the ANP technique permits visualization of more complex interrelationships among the decision levels and attributes. One of the more notable applications of the ANP technique include energy policy planning. Large numbers of pair wise comparisons may make the process somewhat tedious, and such large numbers of elements and their interrelationships require in-depth knowledge of the evaluator for the method and the suppliers.