New Integrated Approach for Solving a Supplier Selection Problem in a Competitive Environment

Abstract

Abstract. The main objective of this paper is a presentation of new integrated approach for solving a supplier selection problem by the use of a defined technique, which derives from LPP (linear physical programming), and execution of F-PROMETHEE (fuzzy preference ranking method for enrichment evaluation) method as a ranking algorithm. The objective of supplier selection problem is an identification of suppliers that have the highest capability of responding desirably to firm’s needs. Suppliers are ranked from the best to worst total performance regarding to use of a common set of criteria and measures. Defined method intends to take two considerable actions: to employ typically available information and lessen the burden of choosing of weights for DM (decision maker). Owing to the paucity of information, measuring of the exact value of the attributed weights of criteria and input data seem to be impossible. Therefore, the use of fuzzy techniques is justifiable. According to brought weights, F-PROMETHEE method is implemented to rank the suppliers. In previous works, weights of criteria were achieved in relation to DM’s comments and there was less attention given to the fact that suppliers work in a competitive environment, furthermore, situations of rivals have not been considered as an important factor, precisely. In addressed approach, the information of the enterprise, which is working with DM and its rivals’ information in different criteria, is regarded as input data and weighting of these criteria and ranking of those suppliers are conducted through a suggested algorithm.

DOI: http://dx.doi.org/10.5755/j01.ee.25.3.5092