A three-phase multicriteria method to the supplier selection problem

This paper describes a new multi-criteria method to solve the general supplier selection problem. The supplier selection problem is complicated and risky, owing to a variety of qualitative and quantitative factors affecting the decision-making process. For this matter, we present a unique three-phase methodology to reduce the base of potential suppliers to a manageable number and optimize the allocation of orders by means of multi-criteria techniques, namely ideal solution approach, Analytical Hierarchy Process (AHP) and Goal Programming (GP). Finally, a real-life example is provided to illustrate how the method can be used in practice. Significance: For those companies where the number of potential suppliers is large, the procurement decision process becomes increasingly complicated. In response to this, in this paper we present an appropriate method to simplify the final selection of suppliers.