A Review on Employing Multi Criteria Decision Making Methods for Supplier Selection

Abstract

The present economic-global business environment and higher market competition has changed the way the firms managing the supply chain activities, right from supplier selection to distribution of products to their customers. With the increasing importance of the purchasing function, supplier management decisions have become more strategic. The Purchase decision practice of organizational buyers has become increasingly a complex, multidimensional and multifunctional activity. The selection of supplier is a key factor to improve business core competition in supply chain management. The supplier selection process deploys a large amount of a firm's financial resources. Various decision making approaches have been proposed to tackle the problem. Multi-criteria decision-making (MCDM) methods support the decision-makers in evaluating the set of supply chain entity with respect to tangible and intangible criteria. MCDM is concerned with theory and methodology that can treat complex problems encountered in business, engineering, and other areas of human activity. This paper provides an extensive review the literature of multi criteria decision making methods and their application in supplier selection.