N. R. Rajhaans , Shantanu Barshikar

Abstract

Supplier selection, the process of determining the suitable suppliers who are able to provide the buyer with the right quality products and services at the right price, at the right time and in the right quantities, is one of the most critical activities in operations management. In other words, supplier selection is a multi-criteria decision making problem which includes both qualitative and quantitative factors. In order to choose the best suppliers, it is essential to make a trade-off between these tangible and intangible factors, some of which may conflict. The aim of this study is to develop a methodology to evaluate suppliers based on Technique for Order Preference by Similarity to Ideal Solution method. This process needs evaluation of multiple criteria and various constraints associated with them. Many changes in business characteristics like global competition, globalization, technological changes, faster product development cycle time, shorter product life cycle and quality consciousness are leading firms towards medium to long term strategic partnerships with a few and innovative suppliers and outsourcing of non-core processes to improve organizational performance and generate strategic and competitive advantage over others. This approach will result in an organization that is an appropriate mix of company's own capabilities with those of partners in a relationship that achieves company's goals and objectives. The aim of this paper is developing a methodology for selection of suppliers in a manufacturing industry. This paper consists of selection of supplier by using TOPSIS method. Here each supplier is ranked over each other by TOPSIS method with the help of spreadsheet. The entire methodology is illustrated with the help of a numerical example and finally the rank of each supplier is determined according to its results.

Keywords- Supplier Selection, TOPSIS, vendors, weights