Track: Decision Sciences

Abstract

Supplier selection is a decision-making process that considers many criteria. The industry has developed and implemented many Multi-criteria Decision-Making (MCDM) methods for supplier selection. The Analytic Hierarchy
Process (AHP) method is one of the most widely used methods, however, the AHP method requires a lot of pairwise comparisons between criteria and alternatives, which will be more complex when there is interdependence between criteria and alternatives. In order to produce better decisions, the AHP method is often implemented with other methods like the Simple Additive Weighting (SAW) method. The SAW method applies simple calculations and does not require complicated computer programs. In previous studies, a single decision-maker carried out AHP and SAW together in the manufacturing industry. In this study, a decision-making method was developed by several decision-makers (DMs) by integrating the AHP and SAW methods. The results of integrating AHP and SAW with multiple decision-makers were tested at a wood trading company called UD BSA for supplier selection. In this study, 3
alternative suppliers were considered. The literature results and brainstorming with the company resulted in 5 criteria and 8 sub-criteria that were considered in selecting suppliers at UD BSA with 2 DMs: the owner as DM1 and
experienced purchasing staff as DM 2. The DM weighting was determined by considering each DM’s expertise in assessing the criteria and sub-criteria. The integration of the AHP and SAW methods with 2 DM produces the output
weight of each DM and the calculation results of the supplier's assessment with the highest ranking. Based on the calculation results, DM2 has a higher weight of 56.13%, which means that DM 2 is more expert in assessing criteria
and sub-criteria. In addition, the best-selected supplier is PP, with the highest overall score of 0.8354. From this case study, UD BSA designed a supplier ranking system, which the company can use if there are new suppliers or future
supplier performance changes.

Keywords
Supplier selection, Analytic Hierarchy Process (AHP), Simple Additive Weighting (SAW), Decision-make