COMBINING ANALYTICAL HIERARCHY PROCESS AND TOPSIS APPROACHES FOR SUPPLIER SELECTION IN A CABLE COMPANY

Abstract

In the competitive business environment of the 21st century,

organizations must reply quickly and precisely to customer demands.

The choice of suppliers and their performance assessment are becoming

major challenges that face supply chain managers or directors.

Evaluating suppliers and selecting one of them are complicated tasks

due to the fact that various criteria or objectives must be considered in

the decision making process. Also in many real world cases the criteria

are not equally important for the purchase managers. In this study, we

proposed a supplier selection analysis model considering both Analytic

Hierarchy Process (AHP) and Technique for Order Preference by

Similarity to Ideal Solution (TOPSIS) method. Subjective and objective

opinions of purchase managers/experts turn into quantitative form with

AHP. TOPSIS technique is used for calculating the supplier’s ratings.

The aim of this paper is to determine the appropriate supplier providing

the most customer satisfaction for the criteria identified in the supply

chain. In this paper, data taken from a well-known cable manufacturing

company in Turkey is used to illustrate the supplier selection procedure.

Due to the fact that main raw material used in all cables, the company

strongly focuses on supply of the Electrolytic Copper Cathode. The

company detects eight different criteria for procurement of the

Electrolytic Copper Cathode. These are origin, quality, availability,

cost, delivery requirements, cost of conveyance, reliability of supplier

and quality certificates. There are four firms providing the Electrolytic

Copper Cathode for the company.