Title: A multicriteria decision model for supplier selection in portfolios with interactions

Authors: Mohammad Hossein Khakbaz, Amir Hossein Ghapanchi, Madjid Tavana

Addresses: Department of Industrial Engineering, Tarbiat Modares University, Tehran, Iran. ' School of Information Systems, Technology and Management, The University of New South Wales, Sydney, Australia. ' La Salle University, Philadelphia, PA 19141, USA

Abstract: Supplier evaluation and selection problems are inherently multicriteria decision problems. Numerous analytical techniques ranging from simple weighted scoring to complex mathematical programming approaches have been proposed to solve these problems. However, traditional supplier selection models too often fail to consider the interaction and the capacity interdependency among the suppliers. Suppliers may exhibit internal interactions if the evaluation criteria used for one supplier are believed to be significantly affected by the evaluation criteria used by one or more of the other suppliers in the group. We propose a new branch-and-bound algorithm that generates portfolio alternatives based on Data Envelopment Analysis (DEA). The DEA model proposed in this study evaluates alternative supplier portfolios with a multicriteria model that considers possible interactions among the suppliers.

Keywords: multicriteria decision making; MCDM; SCM; supply chain management; supplier interactions; Malmquist DEA; data envelopment analysis; supplier selection; weighted sums; portfolio modelling; weighted scoring; capacity interdependency; evaluation criteria; branch-and-bound algorithms; alternative supplier portfolios; operations management.

DOI: 10.1504/IJSOM.2010.035057

International Journal of Services and Operations Management, 2010 Vol.7 No.3, pp.351 - 377

Published online: 02 Sep 2010 *

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