Multi criteria decision-making approach for evaluation of supplier performance with MACBETH method

Abstract

Supply chain consists of all the processes from obtaining the inputs to shipping the final goods to customers. To survive in a competitive environment firms must efficiently manage this chain, minimise the supply risk, decrease their costs, and optimise their inventory level and response customer demands quickly. Measuring and evaluation of supplier performance is also as important as selecting the right supplier. In this study, a multi criteria decision-making method is proposed ranking the suppliers of an international company in Turkey. In the proposed model quantitative criteria (acceptable product rate, major fault, return rate and delivery performance) and qualitative criteria (production flexibility, capacity management, reliability, communication and ecological awareness) are used and it is solved with Measuring Attractiveness by a Categorical Based Evaluation Technique (MACBETH) method. Performances of the suppliers are ranked with M-MACHBET software and sensitivity analysis are also given to discuss further the solution.