Using analytic network process (ANP) and ELECTRE methods for supplier selection decision and an application

As technological improvements increase and markets turn into a global structure, nowadays changes exist in a very fast manner and these changes cause to uncertainty. In this atmosphere of uncertainty, for business, achieving their objectives and being successful depends on the accuracy of the decisions they make. Businesses are required to make certain decisions in all their activities and most of these decisions are strategic decisions that may affect the competitive position of them. One of the most important of these decisions is identifying the suppliers with which business will work. Because supplier selection is an important decision that play a role in the long-term success of business by affecting the factors such as quality, cost and customer satisfaction. So, the decision of selecting supplier in a accurate and objective approach is very important. In this study, supplier selection problem for a business in the machinery sector is considered. Many qualititive and quantitive criteria should be taken into account for selecting the right supplier and therefore, multi-criteria decision making methods, Analytic Network Process (ANP) and ELECTRE methods are applied in an integrated way for supplier selection. The five main criteria and fifteen sub-criteria are determined and all the criteria are weighted by using ANP. Then, the weights obtained by ANP are used in the ELECTRE matrix. Twelve suppliers are evaluated with ELECTRE method and the best supplier is determined. Keywords: Multi-criteria Decision Making, Analytic Network Process, ELECTRE, Supplier Selection