Suppliers Selection Using FAHP and FTOPSIS in a Chemical Manufacturing Company

Abstract

The research aimed to determine the appropriate weight criteria and sub-criteria in selecting the chemical solvent supplier. It was also to recommend the best alternative suppliers using a comparative analysis method of Fuzzy Analytical Hierarchy Process (FAHP) and Fuzzy Technique for Order of Preference by Similarity to Ideal Solution (FTOPSIS). The research was conducted in one of the chemical manufacturing companies in Indonesia. The type of research was descriptive with a quantitative approach that used primary data sources such as questionnaires, interviews, and observations, and secondary data such as books and journals. The criteria studied were cost, quality, delivery, flexibility, supplier profile, and supplier relationship. The results of using FAHP indicate that the criteria with a major influence on the decision making of supplier selection are quality followed by delivery, cost, supplier relationship, flexibility, and supplier profile in sequence. Then, using FTOPSIS, it recommends that the best supplier alternative decision is Supplier A with a weight value of 0,773 and an approved evaluation status. The results have shown that both methods are suitable for supplier selection, particularly in supporting group decision making and modeling uncertainty.

Design of Vendor Selection System Using FAHP and FTOPSIS in Engineering-To-Order Manufacturing Industry

“…By using a fuzzy approach, complex problems with inaccurate data, lacking information, and uncertainty can be handled [16]. There are several previous studies that used the FAHP method as in research [2], [7], [13] where they calculated the weights of the criteria and sub-criteria used. The following are the steps for solving multi-criteria problems using the FAHP method [13]: determine the value of the fuzzy synthetic extent, determine the degree of probability, determine the weight vector, normalize the weight vector.…”

“…TOPSIS will sort alternatives based on the priority value of the relative closeness of an alternative to a positive ideal solution which is then used as a reference for decision makers to choose the best solution in vendor selection [3]. There are several previous studies that used the FTOPSIS method as in the research [2], [13] where they ranked alternative vendors. The following are the steps for solving the problem using the FTOPSIS method [13]: forming a decisionmaking committee, then identifying vendor selection evaluation criteria, selecting appropriate linguistic variables for the weighting of the importance of the criteria and linguistic ratings for alternatives with respect to the criteria, determine the aggregated fuzzy rating, making a fuzzy decision matrix and a normalized fuzzy decision matrix, make a weighted normalized fuzzy decision matrix, determine the fuzzy positive ideal solution (FPIS) and the fuzzy negative ideal solution (FNIS), calculate the distance of each alternative from FPIS and FNIS, calculate the closeness coefficient of each alternative, determine the ranking order of all vendor alternatives.…”

“…Criteria Reference C1 Cost [2], [8], [13], [17] C2 Delivery [2], [8], [13], [17] C3 Service [8] C4 Payment Method [13] C5 Geographical Location [13] C6 Flexibility [2], [8], [13] C7 Relationship [2], [8] C8 Quality [2], [13], [17] C9 Supplier Profile [2], [17] C10 Specification [2] C11 Production Capacity [17] C12 Warranty [17] Level 1 includes the main objective in the hierarchy which is the optimal vendor selection, level 2 includes the criteria used in vendor assessment, level 3 includes alternative vendors.…”

“…One way to get raw materials for production is to buy raw materials from vendors. It is important to determine the right vendor so that it can minimize price comparisons and differences in the amount of raw materials and obtain quality raw materials and optimize supply chain management [2]. In industries related to large-scale production, raw materials and components can account for up to 70% of production costs [3].…”

“…The use of a combination model of the FAHP and FTOPSIS methods can solve MCDM problems in vendor selection [2]. Calculations using FAHP can identify the priority of the criteria used.…”