Multicriteria Decision-Making System for Supplier Selection Considering Risk: A Computational Fuzzy AHP-Based Approach

Abstract

In the latest years, supply chain academics and practitioners have been increasingly concerned with the supplier selection problem. In this paper, a computational system based on 'Fuzzy Extended Analytic Hierarchy Process (Fuzzy AHP)' was developed for supplier selection considering risks. Specifically, we aimed to assess the use of the Fuzzy AHP method in supplier selection and to analyze the support of the proposed system to supplier selection considering risks through a practical application in the Brazilian oil industry. For this, the main criteria, sub-criteria, and alternatives for supplier selection were identified and comparatively assessed by expert managers from the focal company. Through the Fuzzy AHP computational approach the priority weights of each item were calculated. After computing the final score for each supply alternative, supplier A <sub xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">1</sub> was defined as the preferred supplier as it obtained the highest priority weight (0.848), followed by supplier A <sub xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">2 </sub> with the second highest priority weight (0.151). The results of the research raised important opportunities for improving supplier selection considering risks, such as decision rationalization, flexible modeling of decision variables, and automation of subjective judgments and evaluations by decision-makers. These benefits may contribute to lower purchasing costs and improve the overall assessment of supply risks, promoting supply chain competitiveness.