Using a multi-criteria decision making approach (ANP-TOPSIS) to evaluate suppliers in Iran’s auto industry

Abstract

Supplier selection is a multi-criteria problem which includes both tangible and intangible factors in these problems if suppliers have capacity or other different constraints two problems will exist: which suppliers are the best and how much should be purchased from each selected supplier? The objective of this paper is to present an integrated model and a supporting approach for effective supplier selection decisions and determined optimum order allocation. Therefore, an integrated approach of ANP- TOPSIS (Analytic Network Process and Technique for Order Preference by Similarity to Ideal Solution) is proposed in choosing the best suppliers and defined the optimum quantities order among selected suppliers by using a mathematical model (Multi-Objective Linear Programming). Hence, after library studies and interview with experts, managers and specialists in supply chain management filed, decision criterion was identified through brain storming contains of seven main criteria for suppliers selection process. Then in the second section for order allocation to every selected suppliers in first section; we used a (MOLP) Multi-Objective Linear Programming model. Therefore objectives and subjective of suppliers and Automotive Company were identified in this section. Results show that applying a two phase ANP-TOPSIS methodology causes to some important advantages such as: Long-term relationship, consist quality, lower cost, special attention and etc.

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