An Integrated Hybrid MCDM Approach for Vendor Selection Problem (Case Study: Iran Khodro)

Abstract

Vendor selection is an important issue in most company based on many criteria that includes ambiguous or uncertain data. Therefore in the study, it is essential that fuzzy approach is employed for coping with the uncertainty and achieving more accurate results. In other hand, the relationships between criteria and sub-criteria are complex; for encompassing the complexity, most conventional decision models cannot help us explain the interrelationships among the criteria. In this paper, a hybrid multi-criteria decision making (MCDM) technique is proposed to determine the structural relationships and the interrelationships among all the evaluation’s dimensions based the Analytic Network Process (ANP) method determining appropriate weightings to each sub-criterion. Then alternatives priority should be determined which can aid the decision making. For the purpose, The TOPSIS (technique for order performance by similarity to idea solution) is used to rank all competing alternatives in terms of their overall performances. In MCDM studies and research, applying TOPSIS in ranking alternatives has recently been customary because of its advantages. In the end, a case study of an Iranian company, in automotive industry, is demonstrated to illustrate the proposed model can improve solving of vendor selection problem.