Approach Based on the Ordered Fuzzy Decision Making System Dedicated to Supplier Evaluation in Supply Chain Management

Abstract

The selection of suppliers represents a pivotal aspect of supply chain management and has a considerable impact on the success and competitiveness of the organization in question. The selection of a suitable supplier is a multi-criteria decision making (MCDM) problem based on a number of qualitative, quantitative, and even conflicting criteria. The aim of this paper is to propose a novel MCDM approach dedicated to the supplier evaluation problem using an ordered fuzzy decision making system. This study uses a fuzzy inference system based on IF–THEN rules with ordered fuzzy numbers (OFNs). The approach employs the concept of OFNs to account for potential uncertainty and subjectivity in the decision making process, and it also takes into account the trends of changes in assessment values and entropy in the final supplier evaluation. This paper’s principal contribution is the development of a knowledge base and the demonstration of its application in an ordered fuzzy expert system for multi-criteria supplier evaluation in a dynamic and uncertain environment. The proposed system takes into account the dynamic changes in the value of assessment parameters in the overall supplier assessment, allowing for the differentiation of suppliers based on current and historical data. The utilization of OFNs in a fuzzy model then allows for a reduction in the complexity of the knowledge base in comparison to a classical fuzzy system and makes it more accessible to users, as it requires only basic arithmetic operations in the inference process. This paper presents a comprehensive framework for the assessment of suppliers against a range of criteria, including local hiring, completeness, and defect factors. Furthermore, the potential to integrate sustainability and ESG (environmental, social, and corporate governance) criteria in the assessment process adds value to the decision making framework by adapting to current trends in supply chain management.

Keywords

• multi-criteria decision making
• supplier
• supplier evaluation
• supply chain
• fuzzy logic
• ordered fuzzy number