Determination of Extended Fuzzy TOPSIS Method of Criteria Leading to Supplier Selection for Industries

Abstract

Supplier selection decisions require the choices of individual purchases to determine products and order quantities from certain suppliers. When suppliers are evaluated according to well-defined criteria, their level of effort and attention to detail is expected to increase significantly. This can provide to improve productivity. So, determination of supplier selection criteria that is a multi-criteria decision making process can include both quantitative and qualitative elements that are very important. In this article, the aim is to offer a fuzzy decision making method to determine leading criteria, in terms of supplier selection for an automobile company that operates in Iran, because the right suppliers that are selected according to well-defined criteria can significantly reduce the material purchasing costs and improve corporate competitiveness. For that purpose, linguistic values are used for expressing fuzzy numbers in order to assess the ratings and weights of these factors by considering criteria such as the decisions made by people who work in the purchasing department of the company. Afterward, the fuzzy TOPSIS method that is a multiple criteria decision making (MCDM) method according to fuzzy set theory is presented to cope with the determination of supplier selection criteria process. According to the results, it is determined that the following are important for supplier selection criteria for automobile firms: delivery, the amount of past business, reciprocal arrangements, warranties, and geographical location.