SUPPLIER SELECTION AMONG DIFFERENT SCALE CONSTRUCTION COMPANIES USING FUZZY AHP AND FUZZY TOPSIS

Abstract

Supplier selection is an important strategic decision for construction companies due to long-term project durations and high costs. In the construction sector, supplier selection decisions should take several criteria and alternatives into account. Along with the high number of alternative suppliers, choosing the best method to evaluate the alternative suppliers is another critical step. In this study, we compare the effectiveness of different multi-criteria decision‐making methods for selecting the most convenient supplier for construction companies. In this respect, we study the integration of powerful multi-criteria decision‐making methods, Fuzzy Analytic Hierarchy Process (AHP) and Fuzzy Technique for Order Preference by Similarity to Ideal Solution (TOPSIS). We use Fuzzy AHP for the calculation of decision criteria weights, and then we apply Fuzzy TOPSIS for ranking the alternatives. Several interviews were made with the experts at construction companies and as a result of those interviews, 7 main criteria and 24 sub-criteria for comparing alternative suppliers of the companies were determined. We test our approach for two construction companies and use an integrated Fuzzy AHP and Fuzzy TOPSIS method to find the best supplier for the selected criteria. The contribution of this study is not limited to the multi-criteria decision-making methods for the supplier selection problem in the construction sector, but also we make a comparison of the supplier selection decisions of two different sized companies having the same supplier pool, and we show the effect of company based criteria weights in supplier selection.