A Weight Restricted DEA Model for the Supplier Evaluation and Selection

Abstract

Supplier evaluation and selection is an important issue in the supply chain management. Many different factors would have effect on the performance of suppliers, therefore supplier evaluation and selection is a typical multi-criteria decision making problem. Data Envelopment Analysis (DEA) is an effective methodology of evaluating the relative efficiency of Decision Making Units (DMUs) with multiple inputs and outputs. DEA has been widely used in the supplier evaluation and selection problem. However, traditional literatures mostly concentrated on the supplier evaluation and selection without consideration of the decision maker's preference. In this paper, we propose a weight restricted DEA model for the supplier evaluation and selection problem in which two kinds of decision maker's preferences can be reflected by introducing different kinds of weight restrictions. Numerical example is provided to examine the validity and effectiveness of our proposed model. KEYWORD: data envelopment analysis; supplier evaluation; supplier selection; weight restriction