An integrative multi-criteria decision making techniques for supplier evaluation problem with its application

Abstract

Coordinating business operation with suppliers becomes increasingly important to survive and prosper under the dynamic business environment. A good partnership with suppliers not only increase efficiency, but also strengthen corporate competitiveness. Associated with such concern, this study aims to develop a practical approach of multi-criteria supplier evaluation using combined methods of Taguchi loss function (TLF), best-worst method (BWM) and VIse Kriterijumska Optimizacija kompromisno Resenje (VIKOR). A new framework of integrative approach adopting these methods is our main contribution for supplier evaluation in literature. In this integrated approach, a compromised supplier ranking list based on the loss score of suppliers is obtained using efficient steps of a pairwise comparison based decision making process. Implemetation to the case problem with real data from crumb rubber industry shows the usefulness of the proposed approach. Finally, a suitable managerial implication is presented.