Abstract
The supplier selection problem be comes more urgent as competition in the market increases. Quality, cost, and the timely delivery of a product mostly depends on the manufacturer’s suppliers and the materials supplied. Therefore manufacturers are very elaborate in selecting their suppliers and work hard to develop supplier selection strategies. In this study, event tree analysis (ETA) is used to solve a manufacturing firm’s supplier selection problem. ETA is a method that is traditionally used for risk analysis problems, combining the probabilities of risk occurrences subject to the necessary precautions. In this study, this structure is used to select and evaluate suppliers. An event tree is developed to analyse each possible supplier, with branching being used according to the supplier selection criteria. The probability of each branch is set as the performance value of the supplier according to the selection criteria. Finally, the supplier is evaluated by combining all performance values on an event tree basis. Fuzzy logic is also incorporated into the event tree methodology to decrease human error and the effect of uncertainty. Fuzzy triangular numbers are used to denote the performance values of suppliers, and fuzzy ranking is used to distinguish the suppliers into classes. The proposed methodology is applied to nine possible suppliers of a specific material. The results reveal that two of the suppliers dominate all the others in the fuzzy ranking.
Highlights
Supplier selection is a well-known and widely studied problem in the literature, not least because its importance to industry increases along with competition in the market
The first phase includes the classic steps of a supplier selection problem: the determination of decision criteria, the precedence coefficients of the decision criteria, and the alternative suppliers
An event tree structure is developed for each supplier, for which the initiating event is the supplier and the branch probabilities are the supplier’s performances
Summary
Supplier selection is a well-known and widely studied problem in the literature, not least because its importance to industry increases along with competition in the market. Manufacturers are very careful in selecting their suppliers. The supplier selection problem is handled using event tree analysis (ETA), traditionally known as a risk analysis technique. ETA is a method that combines the probabilities of risk occurrence subject to the necessary precautions. Several precautions are identified for the risk under study. An event tree is developed by ‘branching’ each precaution into two, denoting either the success or the failure of the precaution. Each branch in the final level of the tree is associated with a probability and a risk state. A total probability for each risk state is computed
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