A Comprehensive Framework for Supplier Selection: Using Subjective, Objective, and Hybrid Multi-Criteria Decision-Making Techniques With Sensitivity Analysis

Abstract

Improving operational processes significantly relies on choosing the right suppliers, which emphasizes the importance of using effective evaluation methods. This study explores supplier evaluation through a detailed framework involving five Multi-Criteria Decision-Making (MCDM) approaches. These methods consider seven main criteria and twenty-one sub-criteria. In this research, the determination of weights for each criterion and sub-criterion is carried out through a multifaceted approach. Subjective methods, such as the Analytic Hierarchy Process (AHP) and Fuzzy AHP, which rely on expert judgments, are employed alongside objective techniques including Entropy, which is based on empirical data. Hybrid methodologies like AHP-Entropy and Fuzzy AHP-Entropy, which combine elements of both subjective and objective methods, are also utilized. The integration of these diverse methodologies ensures a thorough assessment of supplier performance. Furthermore, the Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) is utilized to rank suppliers according to the weighted criteria. In order to validate the reliability and robustness of the employed methodologies, a comprehensive sensitivity analysis consisting of 21 distinct scenarios is conducted. This exhaustive examination allows for a thorough exploration of how variations in different parameters and conditions may impact the outcomes of the supplier evaluation process. The findings indicate that hybrid methods exhibit stability across nineteen scenarios, while objective methods demonstrate stability in three scenarios, and subjective methods in none. This underscores the importance of integrating both subjective and objective methods in the decision-making process.

Keywords

• Supplier selection
• multi-criteria decision-making
• AHP
• FAHP
• entropy
• AHP-Entropy