Supplier selection problem: integrating DEA with the approaches of total cost of ownership and AHP
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
:Emerald Group Publishing Limited
Copyright © 2007, Emerald Group Publishing Limited