Developing a grey-based decision-making model for supplier selection

The purpose of this study is to develop a decision making model based on the grey relational analysis for supplier selection. Using a multi-criteria decision making approach, the grey system theory has been used to capture the complexity inherent in supplier selection process. In order to enhance the effectiveness of the proposed methodology, an integrated, two-phase model is proposed which integrates the fuzzy pairwise comparison with a grey relational analysis. In the first phase, the proposed model utilises the fuzzy pairwise comparisons technique to tackle some of the limitations in the current grey methodology. In the second phase, a method is proposed to mitigate the bias judgment and inconsistency in pairwise comparisons application in order to improve the results of the first phase. To validate the capability of the proposed model and clarify the details, suppliers of six products from a case study in the auto industry are ranked based on the proposed model, and the results are compared with outcome of the recent grey model in the literature, and the managers’ ranking. The findings suggest that the proposed model provides more consistent and reliable results which are in line with managers’ ranking. Implications of the study to the theory and practice and future research have been outlined. & 2012 Elsevier B.V. All rights reserved.