Abstract
The following research utilizes Multi-Criteria Decision Making (MCDM) in order to build a business strategy to reduce product costs, improve competitiveness, focus on production planning based on actual operating capacity and flexible adjustment according to the market, maximize the labor productivity of technology workshops, reduce costs and inventory, and focus on producing many petrochemical products and products of high economic value. Selecting the right materials supplier is of paramount importance to the success of the organization as a whole. Supplier evaluation and the selection of a suitable supplier is a complex problem in which the decision maker must consider both qualitative and quantitative factors. Multi-Criteria Decision Making Models are an effective tool used to solve complex selection issues including multiple criteria and options, especially for qualitative variables. Thus, the author proposes an MCDM model including the Supply Chain Operation Reference (SCOR) model, analytic hierarchy process (AHP) and the Data Envelopment Analysis (DEA) method to evaluate and select the optimal supplier in the oil industry. The criteria used to evaluate potential suppliers are determined through the SCOR model, the weight of all criteria are defined by the AHP model through an expert’s opinion, and DEA is used to rank providers at the final stage. After the model implementation and the results, decision-making unit DMU_01, DMU_04 and DMU_10 are shown to be the best suppliers. This research provides a Multi-Criteria Decision Making model for supplier evaluation and selection in oil production projects. This research also presents useful guidelines for supplier selection processes in other industries.
Highlights
Oil is one of the most important raw materials in all industries—it is considered to be one of the decisive factors for the success of manufacturing and translation enterprises
The Multi-Criteria Decision Making (MCDM) method will quantify qualitative criteria, calculate the total score of the evaluation subjects according to the weight of each criterion, and help decision makers to have a stronger and more accurate basis on which to make decisions
Qualitative standards often have vague characteristics which are difficult to accurately define, making it difficult to synthesize evaluation results according to criteria and difficult to reach a conclusion or make an accurate decision
Summary
Oil is one of the most important raw materials in all industries—it is considered to be one of the decisive factors for the success of manufacturing and translation enterprises. Global crude oil demand in 2018 amounted to 99.2 million barrels a day and is expected to increase to 100.6 million barrels a day in 2019. In Vietnam, the oil and gas industry has been increasingly invested in and developed by the government [2]. Selecting an appropriate oil and gas supplier is one important strategy to which businesses must pay special attention and which they must consider in the current era of industrialization and modernization. The survey of this must consider many factors, both qualitative
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