2.2 supplier selection ahp
TRANSCRIPT
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Supplier Selectio
through AHP
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Supplier Selection Example
Suppliers: A, B, and C
Criteria: product cost, product quality, service, and deli
PREFERENCE LEVEL NUMERICAL
Equally preferred 1
Equally to moderately preferred 2
Moderately preferred 3
Moderately to strongly preferred 4
Strongly preferred 5
Strongly to very strongly preferred 6
Very strongly preferred 7
Very strongly to extremely preferred 8
Extremely preferred 9
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The Southcorp Company
COST QUALITY SERVICE D
A B C
A 1 3 2
B 1/3 1 1/5
C 1/2 5 1
A B C
A 1 6 1/3
B 1/6 1 1/9
C 3 9 1
A B C
A 1 1/3 1
B 3 1 7
C 1 1/7 1
A
A 1
B 3
C 2
Pairwise comparison
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Analytical Hierarchy Process
1. Establish preferences for each alternative f
criteria2. Assign importance scores to each criteria
3. Preferences and importance scores are co
for final selection
Ranks decision alternatives and selects the b
Allows consideration of multiple criteria
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COST QUALITY SERVICE DE
A B CA 1 3 2
B 1/3 1 1/5
C 1/2 5 1
A B CA 1 6 1/3
B 1/6 1 1/9
C 3 9 1
A B C
A 1 1/3 1
B 3 1 7
C 1 1/7 1
A
A 1
B 3
C 2
Pairwise comparison
COST
SUPPLIER A B C
A 1 3 2
B 1/3 1 1/5
C 1/2 5 1
11/6 9 16/5
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COST QUALITY SERVICE DE
A B C
A 1 3 2
B 1/3 1 1/5
C 1/2 5 1
A B C
A 1 6 1/3
B 1/6 1 1/9
C 3 9 1
A B C
A 1 1/3 1
B 3 1 7
C 1 1/7 1
A
A 1
B 3
C 2
Pairwise comparison
COST
SUPPLIER A B C
A 6/11 3/9 5/8
B 2/11 1/9 1/16
C 3/11 5/9 5/16
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COST QUALITY SERVICE D
A B C
A 1 3 2
B 1/3 1 1/5
C 1/2 5 1
A B C
A 1 6 1/3
B 1/6 1 1/9
C 3 9 1
A B C
A 1 1/3 1
B 3 1 7
C 1 1/7 1
A
A 1
B 3
C 2
Pairwise comparison
COST
SUPPLIER A B C Row Av
A 0.5455 0.3333 0.6250 0.5012
B 0.1818 0.1111 0.0625 0.1185
C 0.2727 0.5556 0.3125 0.3803
1.0000
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Summarized preferences
CRITERIA
SUPPLIER Cost Qual i ty Service Del ive
A 0.5012 0.2819 0.1790 0.156
B 0.1185 0.0598 0.6850 0.619
C 0.3803 0.6583 0.1360 0.224
Pairwise ranking of importance
CRITERIA COST QUALITY SERVICE DELIV
Cost 1 1/5 3 4
Quality 5 1 9 7
Service 1/3 1/9 1 2
Delivery 1/4 1/7 1/2 1
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Summarized preferences
CRITERIA COST QUALITY SERVICE DELIVERY
Cost 0.1519 0.1375 0.2222 0.2857 Quality 0.7595 0.6878 0.6667 0.5000
Service 0.0506 0.0764 0.0741 0.1429
Delivery 0.0380 0.0983 0.0370 0.0714
CRITERIA
Cost 0.1993
Quality 0.6535
Service 0.0860
Delivery 0.0612
Preference vector
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Overall score
C
Cost
Quality
Service
Delivery
CRITERIA
Cost Qual i ty Service Delivery
A 0.5012 0.2819 0.1790 0.1561
B 0.1185 0.0598 0.6850 0.6196
C 0.3803 0.6583 0.1360 0.2243
Supplier A score = 0.1993(0.5012) + 0.6535(0.1819) +0.0860(0.1790) + 0.0612(0.1561)
= 0.3091
Supplier B score = 0.1595
Supplier C score = 0.5314Select Supplier C
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AHP with Excel
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AHP with Excel
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AHP with Excel