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Supplier selection problem: integrating DEA with the approaches of total cost of ownership and AHP

Ramakrishnan Ramanathan (Nottingham University Business School, Nottingham, UK)

Supply Chain Management

ISSN: 1359-8546

Article publication date: 26 June 2007

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Abstract

Purpose

This paper seeks to propose a methodology to integrate the total cost of ownership (TCO) and the analytical hierarchy process (AHP) approaches for selecting appropriate suppliers for a firm.

Design/methodology/approach

This paper suggests an interesting way of combining the objective and subjective information provided by the results of the TCO and AHP approaches through the application of data envelopment analysis (DEA).

Findings

Three different versions of DEA models have been used to illustrate the integration of TCO and AHP.

Research limitations/implications

The integration of DEA with TCO and AHP can be extended to more complex situations, including assessment of risk behaviour of suppliers and including fuzzy concepts.

Practical implications

The proposed integrated model could be used for supplier selection, which involves several quantitative and qualitative factors.

Originality/value

To the best of the author's knowledge, the proposed integrated DEA‐TCO‐AHP model is the first of its kind to be applied for the supplier selection problem.

Keywords

Citation

Ramanathan, R. (2007), "Supplier selection problem: integrating DEA with the approaches of total cost of ownership and AHP", Supply Chain Management, Vol. 12 No. 4, pp. 258-261. https://doi.org/10.1108/13598540710759772

Publisher

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Emerald Group Publishing Limited

Copyright © 2007, Emerald Group Publishing Limited

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