A Combined AHP-QFD-TOPSIS Approach for Supplier Selection

Abstract

The main purpose of the supply chain system is to make profit and meet customers' expectations simultaneously. All members in the supply chain plays an active role in achieving this purpose. Supplier is the first and crucial step in the supply chain and so supplier selection is an important strategic decision for reducing costs, improving competitiveness and increasing customer satisfaction. Selected suppliers should take the voice of customers into account by providing the company's requests. In this context, Quality-function deployment (QFD) ensures that customer needs influence supplier evaluation index. Therefore, an integrated Analytic hierarchy process (AHP)-QFD-Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) methodology is presented for supplier selection problem in this study. First, AHP is used to determine priority ratings of supplier's customer (stakeholder) requirements. Next, QFD is used to establish a relationship matrix in order to identify degree of relationship between customer requirements and supplier selection criteria and calculate the importance weights of evaluating criteria. Finally, TOPSIS is used to rank alternative suppliers for optimal selection.