Interval Type 2 Fuzzy Based AHP Approach: A Case Study

1. Introduction

Selection and assessment of suppliers is a procedure through which suppliers can interact with the customer with the appropriate goods and services of quality at the correct price, in the right quantity and at the proper time. In order to upgrade their range of products, the search for of potential suppliers is really a priority among most businesses. This is mainly because of the product life circle is relatively short and new products often have to be developed with superior materials and/or new technologies. These characteristics are revealed by a complex demand pattern for new materials and skilled labor. Evaluation and supplier selection are a typical problem of decision-making with multiple qualitative as well as quantitative criteria. The effective selection of suppliers is a key and maybe the most important aspect in the purchase process while the aim of the supplier selection is to minimize the risk and to maximize the overall benefit for consumers and a set of influencing factors is included. According to Kagnicioglu et al. (2006), selection of supplier is a vital component in the purchase management because of its role on performance of suppliers on cost, quality, delivery and service in the achievement of the goal of the supply chain. Choosing the appropriate supplier can seem like an expensive supply chain process, but for complex supply chains it is necessary to select the right suppliers as it can help purchaser to meet or exceed regulatory standards, drive customer requirements and build up a strong brand reputation by offering quality products to their customers. The successful management of the supply chain is based on an efficient supplier management which commences with the identification of potential suppliers. Furthermore, proper choice of suppliers reduces purchasing costs significantly and improves competitiveness. In the context of multiple criteria decision making, an explicit consideration of several contradictory targets has made decision-making very difficult. Suppliers are regarded as every organization's best capital resources. Suppliers have different strengths and weaknesses that require careful evaluation before ordering. The main decision making problem in today's competitive marketplace is therefore selection of suppliers (Hruška et al., 2014). A good number of works can be seen in the literature for picking the appropriate supplier and developing criteria that are needed in an organization to assess the performance of suppliers since the 1960s. The first researcher to conduct a complete study to determine, identify and evaluate the factors used for a supplier's choice was Dickson(Dickson, 1966). He came up with a five points scale: extreme, considerable, average, slight and of no importance, for defining the order of importance for each criterion and considering “quality” the most important criterion out of twenty-three criteria.

An efficient supplier management that begins with the identification of potential suppliers is of central importance for successful supply chain management. Also, proper supplier selection significantly reduces the purchasing costs and improves corporate competitiveness. Lin et al. (2006) opines that supplier selection for reducing supplier base is an important goal in Supply Chain Management (SCM). The explicit consideration of multiple, conflicting objectives in a decision model has made the area of multiple criteria decision-making very challenging. Suppliers are considered as the best intangible assets of any organization. Suppliers have varied strengths and weaknesses that require careful assessment before placing the order. So, selection of suppliers is the most important decision making problem in today’s competitive business environment.