Fuzzy Supplier Selection Strategies in Supply Chain Management

Abstract

Supplier selection is a major strategy for manufacture to run the production process smoothly in supply chain network. Supplier categorization, selection and performance evaluation are decisions of strategic importance to companies. Global competition, mass customization, high customer expectations and harsh economic conditions are forcing companies to rely on external suppliers to contribute a larger portion of parts, materials, and assemblies to finished products and to manage a growing number of processes and functions that were once controlled internally. Thus supplier performance evaluation is very important to choose the right supplier for the right product for supply chain management. In this paper a fuzzy supplier selection algorithm (FSSA) is implemented to rank the technically efficient vendors according to both predetermined performance criteria and additional product-related performance criteria. Investigation of the properties of the best supplier alternative by ranking the fuzzy indices allow to develop an algorithm which is based on calculating fuzzy suitability indices for the efficient supplier alternatives and validity is illustrated through an example problem.