Supplier Selection Based on Analytic Hierarchy Process and Grey Relational Analysis

Supplier selection is a multi-criteria decision making problem. The nature of this decision is usually complex and unstructured, whereas it is a decision of great strategic importance for enterprises. In this article an integrated approach of analytical hierarchy process (AHP) and grey relational analysis (GRA) is proposed to consider both tangible and intangible factors in selecting the optimum supplier. The proposed method comprises two parts. The first part employs the AHP to determine the weights of criteria. The second part applies the GRA to rank alternatives and select the best supplier. Results indicate that enterprises consider criteria in the following order of priority: cost, financial status, delivery, product quality and customer service. A case study of supplier selection for a clothing manufacturer is presented, and the proposed methodology is applied to facilitate the decision process. The proposed model can be tailored and applied by enterprises to effectively select supplier firms, making it highly applicable in academia and practice.