Simultaneous Adaptation of AHP and Fuzzy AHP to Evaluate Outsourcing Service in the East and Southeast Asia

Abstract

To sustain competitive advantage, nowadays more than ever, outsourcing is crucially important for international and domestic firms. However, making the right outsourcing decision is not just a simple task, rather a multiple-factor decision-making issue. This paper attempts to aid decision-makers to solve such a difficult problem. We suggest outsourcing hierarchy model based on the concept of the analytic hierarchy process with four levels of the most concerned attributes: competitiveness, human resources, business environment, and government policies. With respect to these factors, six typical alternatives in the Southeast Asian region are selected to compare with China’s ones. We investigate the best outsourcing service destination among these seven typical outsourcing services. Our findings show that China is the optimal outsourcing service destination. Other Southeast Asian nations such as Vietnam, Thailand, or the Philippines are emerging to be the attractive locations. We find that cost competitiveness is the most important attribute. Furthermore, the comparison between the AHP and Fuzzy AHP show some significant differences but lead to similar conclusions. This study bridges the existing gap in the literature to provide decision-makers to construct an outsourcing hierarchy model based on the analytic hierarchy process and Fuzzy-AHP approach with the most concerned factors.