A multiobjective approach to vendor selection

Purchases from vendors involve significant costs for many firms. Decisions related to these purchases include the selection of vendors and the determination of order quantities to be placed with the selected vendors. Such decisions are frequently multiobjective in nature. That is, they are evaluated by more than one criterion. At least 23 criteria for various vendor selection problems have been identified. In this article, the authors present a multiobjective approach to systematically analyze the inherent tradeoffs involved in multicriteria vendor selection problems. The approach is motivated by, and demonstrated with, an actual purchasing problem facing a dividion of a Fortune 500 company.