Supplier evaluation and selection through DEA-AHP-GRA integrated approach- A case study

Abstract: Supplier evaluation and selection play a vital role in establishing an effective supply chain for any firm. The supplier evaluation not only enables the firm to know the performance of suppliers, but also gives an indication of the ability of the firm itself to gain competitive advantage. The appropriate evaluation is the basis for the subsequent selection of the best supplier. This paper presents a hybrid methodology using Data Envelopment Analysis (DEA), Analytic Hierarchy Process (AHP) and Grey Relational Analysis (GRA) to evaluate suppliers and to identify the best supplier for a firm. In this work, super efficiency and cross efficiency methods of DEA are employed to determine the efficiencies and the performance scores of the suppliers respectively. On the basis of super efficiency and cross efficiency scores, the list of efficient suppliers with high performance is identified and GRA methodology is adopted to identify the best supplier. A case study is presented to demonstrate the proposed hybrid methodology.

How to cite this paper

 Prasad, K., Subbaiah, K & Prasad, M. (2017). Supplier evaluation and selection through DEA-AHP-GRA integrated approach- A case study.Uncertain Supply Chain Management, 5(4), 369-382.

Refrences

\Adler, N., Friedman, L., &Sinuany-Stern, Z. (2002). Review of ranking methods in the data envelopment analysis context. European Journal of Operational Research, 140(2), 249-265.
Burton, T. (1988). JIT/repetitive sourcing strategies: tying the knot with your suppliers. Production and Inventory Management Journal, 29(4), 38-41.
Chang, C. W., Wu, C. R., Lin, C. T., & Lin, H. L. (2007). Evaluating digital video recorder systems using analytic hierarchy and analytic network processes. Information Sciences, 177(16), 3383-3396.
Prasad, K. G. D., Subbaiah, K.V., Rao, C. V. G., & Rao, K.N. (2012). Supplier evaluation through data envelopment analysis. Journal of Supply Chain Management Systems, 1(2), 1-11.
Ebadi, S. (2012). Using a super efficiency model for ranking units in DEA. Applied Mathematical Sciences, 6(41), 2043-2048.
Elanchezhian, C., Vijaya Ramnath, B., & Kesavan, R. (2010). Vendor selection using analytical hierarchy process in supply chain management. Journal of Engineering Research, 1(1), 118-127.
Elanchezhian, C., Ramnath, B. V., & Kesavan, R. (2010 a). Vendor evaluation using multi criteria decision making technique. International Journal of Computer Applications,5(9), 4-9.
Handfield, R., Walton, S. V., Sroufe, R., & Melnyk, S. A. (2002). Applying environmental criteria to supplier assessment: A study in the application of the Analytical Hierarchy Process. European Journal of Operational Research, 141(1), 70-87.
Ho, W., Xu, X., & Dey, P. K. (2010). Multi-criteria decision making approaches for supplier evaluation and selection: A literature review. European Journal of Operational Research, 202(1), 16-24.
Al-Harbi, K. M. A. S. (2001). Application of the AHP in project management. International Journal of Project Management, 19(1), 19-27.
Ma, R., Yao, L., Jin, M., & Ren, P. (2014). The DEA game cross-efficiency model for supplier selection problem under competition. Applied Mathematics & Information Sciences, 8(2), 811-818.
Madhuri, C. B., & Chandulal, J. A. (2010). Evaluating web sites using COPRAS-GRA combined with grey clustering. International Journal of Engineering Science and Technology, 2(10), 5280-5294.
Malekmohammadi, N., Lotfi, F. H., & Jaafar, A. B. (2011). Data envelopment scenario analysis with imprecise data. Central European Journal of Operations Research, 19(1), 65-79.
Narasimhan, R., Talluri, S., & Mendez, D. (2001). Supplier evaluation and rationalization via data envelopment analysis: an empirical examination. Journal of Supply Chain Management, 37(2), 28-37.
Nydick, R. L., & Hill, R. P. (1992). Using the analytic hierarchy process to structure the supplier selection procedure. Journal of Supply Chain Management, 28(2), 31-36.
Pitchipoo, P., Venkumar, P., & Rajakarunakaran, S. (2012). A distinct decision model for the evaluation and selection of a supplier for a chemical processing industry. International Journal of Production Research, 50(16), 4635-4648.
Politis, S., Klumpp, M., & Celebi, D. (2010). Analytical hierarchy process in supplier evaluation. In Proceedings of the 16th International Working Seminar on Production Economics (Vol. 3, pp. 411-424).
Punniyamoorty, M., Mathiyalagan, P., & Lakshmi, G. (2012). A combined application of structural equation modeling (SEM) and analytic hierarchy process (AHP) in supplier selection. Benchmarking: An International Journal, 19(1), 70-92.
Radfar, R., & Salahi, F. (2014). Evaluation and ranking of suppliers with fuzzy DEA and PROMETHEE approach. International Journal of Industrial Mathematics, 6(3), 189-197.
Samvedi, A., Jain, V., & Chan, F. T. (2012). An integrated approach for machine tool selection using fuzzy analytical hierarchy process and grey relational analysis. International Journal of Production Research, 50(12), 3211-3221.
Sepehrdoust, H. (2011). Efficiency measurement of housing sector; using DEA model. In 2011 International Conference on Economics and Finance Research. IPEDR. 4 (2011).
Talluri, S., & Narasimhan, R. (2004). A methodology for strategic sourcing. European Journal of Operational Research, 154(1), 236-250.
Tahriri, F., Osman, M. R., Ali, A., Yusuff, R. M., & Esfandiary, A. (2008). AHP approach for supplier evaluation and selection in a steel manufacturing company. Journal of Industrial Engineering and Management, 1(2), 54-76.
Tam, M. C., & Tummala, V. R. (2001). An application of the AHP in vendor selection of a telecommunications system. Omega, 29(2), 171-182.
Timmerman, E. (1986). An approach to vendor performance evaluation. International Journal of Purchasing and Materials Management, 22(4), 2-8.
Tsinidou, M., Gerogiannis, V., & Fitsilis, P. (2010). Evaluation of the factors that determine quality in higher education: an empirical study. Quality Assurance in Education, 18(3), 227-244.
Subbaiah,K.V., DurgaPrasad,K.G., Uma Bharathi,M.,& Rao, K.S.S. (2011). Integrating Factor analysis and Analytic hierarchy process for library service quality. International Journal for Quality Research,5(3), 205-212.
Ventura, J. A., Valdebenito, V. A., & Golany, B. (2013). A dynamic inventory model with supplier selection in a serial supply chain structure. European Journal of Operational Research, 230(2), 258-271.
Wu, T., Shunk, D., Blackhurst, J., & Appalla, R. (2007). AIDEA: A methodology for supplier evaluation and selection in a supplier-based manufacturing environment. International Journal of Manufacturing Technology and Management, 11(2), 174-192.
Weber, C. A., Current, J. R., & Benton, W. C. (1991). Vendor selection criteria and methods. European Journal of Operational Research, 50(1), 2-18.
Wei, C., & Jun-fu, C. (2011). Theoretical discussion of applying grey system theory in neuropsychological studies. Grey Systems: Theory and Application, 1(3), 268-273.
Yang, C. C., & Chen, B. S. (2006). Supplier selection using combined analytical hierarchy process and grey relational analysis. Journal of Manufacturing Technology Management, 17(7), 926-941.
Yang, J. L., Chiu, H. N., Tzeng, G. H., & Yeh, R. H. (2008). Vendor selection by integrated fuzzy MCDM techniques with independent and interdependent relationships. Information Sciences, 178(21), 4166-4183.
Zohrehbandian, M., & Gavgani, S. S. (2013). Cross-efficiency evaluation under the principle of rank priority of DMUs. World Applied Sciences Journal, 21, 46-49.