An Integrated AHP-Entropy Approach for Spare Parts Supplier Evaluation and Order Quantity Allocation

Abstract

This paper employs a two-stage method to the spare parts supplier evaluation problem and the order quantity allocation problem. In the first stage, we integrated approaches of analytic hierarchy process (AHP) and information entropy to evaluate the suppliers. In the second stage, the alternative suppliers’ weight scores obtained in the first stage are used as coefficients of the objective functions in a linear programming model. The model is developed to determine the optimal order quantity from the suppliers with consideration of the suppliers’ capacities and the buyer’s quality requirements of the products and service. A numerical example about the typical spare parts - ingot mold purchasing in an iron & steel company is presented to illustrate the approach proposed finally