Multi-Criteria Decision Making (MCDM) Model for Supplier Evaluation and Selection for Oil Production Projects in Vietnam

Abstract

The following research utilizes Multi-Criteria Decision Making (MCDM) in order to build a business strategy to reduce product costs, improve competitiveness, focus on production planning based on actual operating capacity and flexible adjustment according to the market, maximize the labor productivity of technology workshops, reduce costs and inventory, and focus on producing many petrochemical products and products of high economic value. Selecting the right materials supplier is of paramount importance to the success of the organization as a whole. Supplier evaluation and the selection of a suitable supplier is a complex problem in which the decision maker must consider both qualitative and quantitative factors. Multi-Criteria Decision Making Models are an effective tool used to solve complex selection issues including multiple criteria and options, especially for qualitative variables. Thus, the author proposes an MCDM model including the Supply Chain Operation Reference (SCOR) model, analytic hierarchy process (AHP) and the Data Envelopment Analysis (DEA) method to evaluate and select the optimal supplier in the oil industry. The criteria used to evaluate potential suppliers are determined through the SCOR model, the weight of all criteria are defined by the AHP model through an expert’s opinion, and DEA is used to rank providers at the final stage. After the model implementation and the results, decision-making unit DMU_01, DMU_04 and DMU_10 are shown to be the best suppliers. This research provides a Multi-Criteria Decision Making model for supplier evaluation and selection in oil production projects. This research also presents useful guidelines for supplier selection processes in other industries.

Multiple Criteria Decision-Making for Developing an International Game Participation Strategy: A Novel Application of the Data Envelopment Analysis (DEA) Two-Stage Efficiency Process

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Risk Evaluation of Electric Power Grid Enterprise Related to Electricity Transmission and Distribution Tariff Regulation Employing a Hybrid MCDM Model

“…As this paper employs the MCDM method to undertake the risk evaluation of electric power grid enterprise related to electricity transmission and distribution tariff regulation, it is of significance to go through the researches concerning the MCDM method. Wang, et al proposes an MCDM model combining the analytic hierarchy process (AHP), Supply Chain Operation Reference (SCOR) model, and the Data Envelopment Analysis (DEA) method to evaluate and obtain the optimal supplier in the oil industry [17]. Ghasempour, et al use a wide variety multi-criteria decision making (MCDM) methods, which were investigated by various researchers, to figure out the effective criteria in selecting solar plants sites and solar plants technologies [18].…”

Stakeholders’ environmental preferences based corporate environmental information influencing factors research

“…The analytical hierarchy process (AHP), proposed by Saaty (Saaty, 1977), entropy, Delphi, ANP, fuzzy measures, and so on are the widely utilized approaches in MCDM. Among them, the AHP is the most widely used and easiest to be a promoted method with the advantages of its impartial and logical classification system, fully considering the subjective opinions of the decision makers and easily transforming subjective assessments into objective ones (Wang et al., 2020). Due to the measurement of environmental information, weight is mainly relying on the subjective opinions, it is inappropriate to adopt the entropy method since its advantage is to use the data gap as the basis for decision‐making (Wang et al., 2020b).…”