Selection of vendor using analytical hierarchy process based on fuzzy preference programming

Modern businesses face a more severe and challenging environment than before. Selection of Vendor and evaluating its performance are decisions of strategic importance from business point of view. Selecting Vendors involve those that perform optimally on the desired multicriteria dimensions like cost, quality, delivery performance etc. In this paper we identify the major criteria for selecting vendors and develop a hierarchy through which decision maker can examine the relationship among these criteria. Some of these criteria possess characteristics of fuzziness. By applying AHP based on fuzzy preference programming (FPP) a pair wise comparison is made between criteria. The whole process of fuzzy AHP involves decomposition, pairwise comparison, interval comparison, derive priorities using optimization technique of FPP. An overall crisp priority is obtained for ranking the best Vendor. A numerical example illustrates our methodology.