An AHP Based Approach for Supplier Evaluation and Selection in Supply Chain Management

Supply Chain Management is an integrated approach to increase the effectiveness of the logistics chain by improving cooperation between the players in the chain. Supplier selection is one of the most crucial activities performed by organizations because of its strategic importance. Supplier selection is a multi-objective problem involving both quantitative and qualitative criteria the paper proposes a structured model for evaluating vendor selection using the analytical hierarchy process (AHP). The model is developed using evidence from an empirical study.The objective of this paper is to demonstrate how a wellknown decision support methodology, the analytic hierarchy process (AHP), can be used for supporting supply chain development processes by evaluating and selecting best vendor for material procurement. A usability evaluation of the AHP-based model with three vendors is discussed. The effectiveness of the AHP model is illustrated by using an industry case study in the northern part of India.