A Multi-criteria Decision Support System for Supplier Selection

Abstract

The success of a company depends directly on the performance of its suppliers. In this sense, all aspects that contribute to the competitiveness of a good or service must be considered during the selection of suppliers; these aspects include price, quality, lead time, etc. Therefore, the management of the supply chain should ensure a structured procedure for selecting its suppliers, in which a multi-criteria analysis approach is effectively considered during the selection. This chapter presents a multi-criteria decision support system for selecting suppliers; the system is divided into three main parts: (i) a structural phase, in which the parameters of the model are defined; (ii) the application of the multi-criteria method, in which the multi-criteria method PROMETHEE II is applied to construct a ranking of suppliers according to the parameters defined in the previous step; and (iii) the analysis of the results, in which a sensitivity analysis is performed to verify the robustness of the results. Also, in this chapter, this system was applied to a problem in the civil construction industry and shows that the proposed decision support system is a powerful tool to be used by any organization to support their supplier selection processes. The system assures an evaluation of suppliers based on a set of aspects that are important with regard to the purchasing of a good; also, the decision support system encourages impartiality during the selection and improves the transparency of the process, which indicates that the system is appropriate to support the selection process that occurs in public organizations.