Development of Decision Making Model Using Integrated AHP and DEA for Vendor Selection

Abstract

In today's highly competitive and interrelated manufacturing environment, effective selection of suppliers is very important to the success of a manufacturing firm .Evaluating and selecting the best among the offers provided by various suppliers is a complex problem that takes into account both tangible and intangible criteria's. This paper considers supplier selection as a multi-criterion decision problem. Data envelope analysis (DEA) is used in this paper to generate local weights of alternatives from pair-wise comparison judgment matrices used in the analytical hierarchy process (AHP).The local weights generated using DEA are being aggregated using the AHP procedure.