A Multi-Criteria Decision-Making (MCDM) Approach Using Hybrid SCOR Metrics, AHP, and TOPSIS for Supplier Evaluation and Selection in the Gas and Oil Industry

The following research utilizes Multi-Criteria Decision Making (MCDM) in order to build a business strategy to reduce product costs, improve competitiveness, focus on production planning based on actual operating capacity and flexible adjustment according to the market, maximize the labor productivity of technology workshops, reduce costs and inventory, and focus on producing many petrochemical products and products of high economic value. Selecting the right materials supplier is of paramount importance to the success of the organization as a whole. Supplier evaluation and the selection of a suitable supplier is a complex problem in which the decision maker must consider both qualitative and quantitative factors. Multi-Criteria Decision Making Models are an effective tool used to solve complex selection issues including multiple criteria and options, especially for qualitative variables. Thus, the author proposes an MCDM model including the Supply Chain Operation Reference (SCOR) model, analytic hierarchy process (AHP) and the Data Envelopment Analysis (DEA) method to evaluate and select the optimal supplier in the oil industry. The criteria used to evaluate potential suppliers are determined through the SCOR model, the weight of all criteria are defined by the AHP model through an expert’s opinion, and DEA is used to rank providers at the final stage. After the model implementation and the results, decision-making unit DMU_01, DMU_04 and DMU_10 are shown to be the best suppliers. This research provides a Multi-Criteria Decision Making model for supplier evaluation and selection in oil production projects. This research also presents useful guidelines for supplier selection processes in other industries.

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“…The Charnes-Cooper-Rhodes (CCR) model is a basic DEA model [22]. The definition of the CCR model is as follows:…”

Section: Dea Modelmentioning

confidence: 99%

Multi-Criteria Decision Making (MCDM) Model for Supplier Evaluation and Selection for Oil Production Projects in Vietnam

Wang

Tsai

et al. 2020

Processes

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“…Asset management efficiency Financial situation of suppliers [10,11,14,16,17,20] Payment term allowed Revenue over a year Inventory amount of suppliers Supply chain operation reference was proposed in 1996 [8,9] by Theodore Pittiglio, Robert Rabin, Robert Todd, and Michael McGrath [10]. Specifically, the SCOR model describes business activities related to meeting customer needs, including planning, sourcing, execution, delivery, and return.…”

Section: Maintenance Cost Transportation Costsmentioning

confidence: 99%

“…This model allows companies to conduct comprehensive analysis based on practically all aspects of their supply chain by providing a complete set of process, performance, and real-life metrics best practices in the industry [10]. The performance attributes of SCOR data are shown below [11]. The SCOR's process includes: definition of process components, input-output, process performance data, selected best supplier [8,[12][13][14][15].…”

Section: Maintenance Cost Transportation Costsmentioning

confidence: 99%

“…The problem of decision-making becomes more complicated when there are many groups of people and experts involved in the decision-making process. In order to select suppliers with objectivity, Ability to meet delivery demand [8,[10][11][12][14][15][16]20] Ability to receive returns products Ability to produce new raw materials Costs Material cost [8,[11][12][13][14]16,19]…”

Section: Introductionmentioning

confidence: 99%

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Fuzzy Multicriteria Decision-Making Model (MCDM) for Raw Materials Supplier Selection in Plastics Industry

Wang,

Nguyen,

Chyou

et al. 2019

Mathematics

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To be able to compete in the domestic plastic industry, small and medium-sized enterprises producing plastic need to proactively find the supply of raw materials, avoiding shortages like in the previous years. Purchasing is extremely important and will create a competitive advantage with competitors in the market, so finding suppliers will determine the success in the later stages of the production chain. With the development of the current information system, selection and evaluation have become important in order to achieve effective decision-making through optimal options. In this study, the authors provide a new approach for decision-makers in evaluating and selecting suppliers, which is formulated based on the supply chain operation reference (SCOR) model, fuzzy analytic network process (FANP), and VIseKriterijumska Optimizacija I Kompromisno Resenje (VIKOR). The contribution of this research is to propose a multicriteria decision-making model (MCDM) for raw material supplier selection in the plastic industry. This research also provided a useful guideline for supplier selection in other industry.Mathematics 2019, 7, 981 2 of 17 avoiding subjective factors such as human factors, documents, relationships, etc., that is vague and incomplete in making decisions is crucial [4]. Moreover, most previous studies have assumed that each criterion cluster in the method they use has equal weight to solve the problem with a weighted hyper matrix [5,6]. Therefore, previous studies have not exploited the advantages and disadvantages of the models or methods they have applied. With the development of the current information system, selection and evaluation have become important to achieve effective decision-making through optimal options [7].According to the Vietnam Plastics Association (VPA), each year, Vietnam's plastic industry needs about 5 million tons of plastic materials and hundreds of additives, while domestic production can only supply about 900,000 tons of raw materials/year. According to the data from the General Department of Customs, Vietnam must import 4.54 million tons of plastic materials worth nearly $6.3 billion, up 15.7% over the same period.The reliance on imported plastic materials not only causes businesses to stagnate capital because of stockpiling raw materials, but also has potential risks on exchange rates and world oil prices. Every time the VND/USD exchange rate increases, input costs of plastic businesses will increase accordingly.The primary goal of this research is to propose a multi criteria decision-making model (MCDM) for raw material supplier selection in plastic industry and also provide a useful guideline for supplier selection in other industry.In this study, the proposed model provides a new approach for decision-makers in evaluating and selecting suppliers, which is formulated based on the supply chain operation reference (SCOR) model, fuzzy analytic network process (FANP), and VIseKriterijumska Optimizacija I Kompromisno Resenje (VIKOR).This paper provides research background, moti...

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“…An overview of different (fuzzy) multi-objective decision-making methods, or problems with an integration of fuzzy weights to their algorithms, clearly confirmed that the fuzzy set theory and its corresponding developments have enough capability to properly deal with the subjectivity of experts' opinions, and it is also strongly necessary. [23][24][25] In order to formulate the aggregation procedure about the opinions obtained by exports, a mathematical programming can make valid outputs, which are feasible and optimum. 26,27 In this accordance, the main aim of this study is to introduce a heuristic approach based on a mathematical programming as well as an extension to fuzzy set theory.…”

Section: Introductionmentioning

confidence: 99%

Introducing a heuristic approach to enhance the reliability of system safety assessment

Yazdi

2019

Quality & Reliability Eng

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Probabilistic risk assessment techniques are the important tools which can considerably improve the safety performance of the studied system and reduce the risk to an acceptable level. Typically, decision‐making process is an important part of risk assessment methods that accordingly bring the ambiguity inside. Decision makers as experts commonly express their subjective opinions about the occurrence of the root events in order to obtain the probability of the undesired event. Subsequently, the critical root events are identified, and possible intervention is performed to reduce the probability of the critical events. However, the serious point is the viability of the obtained probabilities and priority ranking of the critical events. In this study, a heuristic optimization model of linear mathematical programming using triangular intuitionistic fuzzy number (TrIFN) is proposed to obtain the feasible, optimum, and reliable results compared with available methods. The Spearman correlation is performed to examine the reliability and behavior of the proposed model. In order to show the effectiveness of the proposed approach, it is applied on a real case study. The application of the model confirms its robustness to prioritize critical root events over the conventional one.

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A Multi-Criteria Decision-Making (MCDM) Approach Using Hybrid SCOR Metrics, AHP, and TOPSIS for Supplier Evaluation and Selection in the Gas and Oil Industry

Cited by 51 publications

References 18 publications

Multi-Criteria Decision Making (MCDM) Model for Supplier Evaluation and Selection for Oil Production Projects in Vietnam

Multi-Criteria Decision Making (MCDM) Model for Supplier Evaluation and Selection for Oil Production Projects in Vietnam

Fuzzy Multicriteria Decision-Making Model (MCDM) for Raw Materials Supplier Selection in Plastics Industry

Introducing a heuristic approach to enhance the reliability of system safety assessment

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