HOW TO SELECT THE PORTFOLIO OF SUPPLIERS USING THE OUTRANKING MULTI-ATTRIBUTE DECISION MAKING METHOD

1 ZAPLETAL František
Institution:
1 VŠB – Technical university of Ostrava, Faculty of Economics, Ostrava, Czech Republic, frantisek.zapletal@vsb.cz
Conference:
CLC 2018 - Carpathian Logistics Congress, Wellness Hotel Step, Prague, Czech Republic, EU, December 3 - 5, 2018
Proceedings:
Proceedings CLC 2018 - Carpathian Logistics Congress
Pages:
110-115
ISBN:
978-80-87294-88-8
ISSN:
2694-9318
Published:
18th April 2019
Proceedings of the conference were published in Web of Science.
Metrics:
540 views / 271 downloads
Abstract

Suppliers are an inevitable part of a logistics chain. It is crucial for each company to select the best possible suppliers. Suppliers’ selection is a typical problem of multi-attribute decision making (MADM). All traditional methods for multi-criteria decision making have already been used to evaluate suppliers. However, very often the ranking of (potential) suppliers is not the final desirable result, because not only the best one, but a set of suppliers must be chosen. An intuitive way would be to select the first n suppliers in the ranking. But, this study shows, that this approach can lead to distorted results. In this paper, the PROMETHEE outranking method of MADM combined with mixed integer programming is used to find the optimal portfolio of suppliers under various constraints (number of suppliers, demand for different types of products, available stocks of suppliers, limited budget of the company, etc.). The proposed application is demonstrated using the numerical example.

Keywords: suppliers, portfolio, PROMETHEE, outranking methods

© This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Scroll to Top