An analytical hierarchy process based procurement selection method

Abstract

Procurement selection continues to be topical, and several advanced studies have been reported. One of the key concerns of procurement selection is how to enhance objectivity. A selection method developed using multi-attribute utility technology (MAUT) and the analytical hierarchy process (AHP) is proposed. With the input of industrial experts, critical procurement selection criteria and procurement strategies commonly used in Hong Kong were identified. Against these criteria, utility factors corresponding to various procurement strategies were then assigned by the experts to create a utility factor table. To cater for individual project characteristics, the relative importance weightings of the selection criteria were assessed using the analytical hierarchy process. Final selection was then based on the highest utility value derived from the procurement strategies, taking into account the relative importance of the selection criteria. The use of the model is illustrated with actual data.