Multi Criteria Decision Making in Supplier Selection Process – A Case Study in a Palm Oil Processor

摘要

Sourcing is considered as one of strategic decision in supply chain. In industry with impacts on environment, supplier selection must even go beyond traditional criteria such as cost, delivery and quality. The study is a case study in a palm oil processor aiming to evaluate and shortlist its current suppliers. The research first analyzed comprehensive criteria & sub-criteria to be used for the studied company, taking into account sustainability impact on palm oil processes. Twelve sub-criteria grouped into Cost, Quality, Delivery an Environment were recommended for the studied company. The research then evaluated five existing CPO suppliers of the studied company against the selected sub-criteria using combination of AHP and TOPSIS approach. Weight of criteria and sub-criteria was calculated using AHP, while supplier ranking was done using TOPSIS, to make sure the shortlisted supplier has closest distance from the best ones and farthest distance from the worse one. The results recommended the studied company to shortlist its supplier into top 3 suppliers.