Vendor selection in a supply chain using analytic hierarchy process and genetic algorithm methods

The performance of the vendor is a key element in a company's success or failure. In order to attain the goals of low cost, consistent high quality, flexibility and quick response, companies have increasingly considered better vendor selection approaches. The overall goal of selection is to identify high-potential vendors and their quota allocations. An effective and appropriate vendor selection method is therefore very crucial to the competitiveness of companies. This paper presents a logical procedure for solving the vendor selection problem in a supply chain environment with multiple objectives. The procedure is based on a combined Analytic Hierarchy Process (AHP) and a Genetic Algorithm (GA) method. The proposed procedure has the capability to handle realistic situations and provides a decision-making tool for the vendor selection decision in a supply chain. An example is included to illustrate the approach.