Transcript Document
Supplement S7 Supplier Selection To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Analytical Hierarchy Process Ranks decision alternatives and selects the best one Allows consideration of multiple criteria 1. Establish preferences for each alternative for each criteria 2. Assign importance scores to each criteria 3. Preferences and importance scores are combined for final selection To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Supplier Selection Example Suppliers: A, B, and C Criteria: product cost, product quality, service, and delivery PREFERENCE LEVEL Equally preferred Equally to moderately preferred Moderately preferred Moderately to strongly preferred Strongly preferred Strongly to very strongly preferred Very strongly preferred Very strongly to extremely preferred Extremely preferred NUMERICAL VALUE 1 2 3 4 5 6 7 8 9 Table S7.1 To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Southcorp Company Pairwise comparison COST A B C A 1 3 2 B 1/3 1 1/5 C 1/2 5 1 QUALITY A B C A 1 6 1/3 B 1/6 1 1/9 C 3 9 1 SERVICE A B C A B C 1 1/3 1 3 1 7 1 1/7 1 DELIVERY A B C A B C 1 1/3 1/2 3 1 4 2 1/4 1 Example S7.1 To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Southcorp Company Pairwise comparison COST A B C A 1 3 2 B 1/3 1 1/5 C 1/2 5 1 QUALITY A B C SERVICE A B C A 1 6 1/3 B 1/6 1 1/9 C 3 9 1 A B C 1 1/3 1 3 1 7 1 1/7 1 DELIVERY A B C A B C 1 1/3 1/2 3 1 4 2 1/4 1 COST SUPPLIER A B C A B C 1 1/3 1/2 3 1 5 2 1/5 1 11/6 9 16/5 Example S7.1 To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Southcorp Company Pairwise comparison COST A B C A 1 3 2 B 1/3 1 1/5 C 1/2 5 1 QUALITY A B C SERVICE A B C A 1 6 1/3 B 1/6 1 1/9 C 3 9 1 A B C 1 1/3 1 3 1 7 1 1/7 1 DELIVERY A B C A B C 1 1/3 1/2 3 1 4 2 1/4 1 COST SUPPLIER A B C A B C 6/11 2/11 3/11 3/9 1/9 5/9 5/8 1/16 5/16 Example S7.1 To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Southcorp Company Pairwise comparison COST A B C A 1 3 2 B 1/3 1 1/5 C 1/2 5 1 QUALITY A B C SERVICE A B C A 1 6 1/3 B 1/6 1 1/9 C 3 9 1 A B C 1 1/3 1 3 1 7 1 1/7 1 COST SUPPLIER A B C DELIVERY A B C A B C 1 1/3 1/2 3 1 4 2 1/4 1 Row A B C Average 0.5455 0.1818 0.2727 0.3333 0.1111 0.5556 0.6250 0.0625 0.3125 0.5012 0.1185 0.3803 1.0000 Example S7.1 To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Southcorp Company Summarized preferences CRITERIA SUPPLIER Cost Quality Service Delivery A B C 0.5012 0.1185 0.3803 0.2819 0.0598 0.6583 0.1790 0.6850 0.1360 0.1561 0.6196 0.2243 Pairwise ranking of importance CRITERIA Cost Quality Service Delivery COST QUALITY SERVICE DELIVERY 1 5 1/3 1/4 1/5 1 1/9 1/7 3 9 1 1/2 4 7 2 1 Example S7.1 To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Southcorp Company Summarized preferences CRITERIA COST QUALITY SERVICE DELIVERY ROW AVERAGES Cost Quality Service Delivery 0.1519 0.7595 0.0506 0.0380 0.1375 0.6878 0.0764 0.0983 0.2222 0.6667 0.0741 0.0370 0.2857 0.5000 0.1429 0.0714 0.1993 0.6535 0.0860 0.0612 1.0000 Preference vector CRITERIA Cost Quality Service Delivery 0.1993 0.6535 0.0860 0.0612 Example S7.1 To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Southcorp Company Overall score CRITERIA A B C Cost Quality Service Delivery 0.5012 0.1185 0.3803 0.2819 0.0598 0.6583 0.1790 0.6850 0.1360 0.1561 0.6196 0.2243 CRITERIA Cost Quality Service Delivery 0.1993 0.6535 0.0860 0.0612 Supplier A score = 0.1993(0.5012) + 0.6535(0.1819) + 0.0860(0.1790) + 0.0612(0.1561) = 0.3091 Supplier B score = 0.1595 Select Supplier C Supplier C score = 0.5314 Example S7.1 To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. AHP with Excel Exhibit S7.1 To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. AHP with Excel Exhibit S7.2 To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. AHP with Excel Exhibit S7.3 To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved.