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Keywords: Supplier selection is an important issue in supply chain management. In recent years, determining the
Fuzzy numbers best supplier in the supply chain has become a key strategic consideration. However, these decisions usu-
Supply chain management ally involve several objectives or criteria, and it is often necessary to compromise among possibly con-
Supplier selection flicting factors. Thus, the multiple criteria decision making (MCDM) becomes a useful approach to
Multiple criteria decision making (MCDM)
solve this kind of problem. Considering both tangible and intangible criteria, this study proposes inte-
Techniques for order preference by
similarity to ideal solution (TOPSIS)
grated fuzzy techniques for order preference by similarity to ideal solution (TOPSIS) and multi-choice
Multi-choice goal programming (MCGP) goal programming (MCGP) approach to solve the supplier selection problem. The advantage of this
method is that it allows decision makers to set multiple aspiration levels for supplier selection problems.
The integrated model is illustrated by an example in a watch firm.
Ó 2011 Published by Elsevier Ltd.
Customer
Suppliers Procurement Produce Marketing Retailers
Suppliers Retailers
Customer
quality, and conflict resolution. Lin and Chang (2008) claimed that niques for order preference by similarity to ideal solution (TOPSIS).
communication, reputation, industry position, relationship close- Recently, the integration of different methodologies to supplier
ness, customer responsiveness, and conflict-solving capabilities selection process has received considerable attention in the supply
are important criteria in vendor selection. In addition, the role of chain management literature. Faez, Ghodsypour, and O’brien
organizational size in the supplier selection process has been ad- (2009) presented an integrated fuzzy case-based reasoning and
dressed by Wang, Cheng, and Cheng (2009). Table 1 summarizes mathematical programming method. Önüt, Kara, and Isik (2009)
the criteria that have appeared in literature since 1966; most of developed a supplier evaluation approach based on the ANP and
the articles referenced above suggest that quality, price, and deliv- TOPSIS methods to help a telecommunication company in vendor
ery performance are the most important supplier selection criteria. selection. Ha and Krishnan (2008) developed a hybrid model that
Over the years, a number of techniques have been proposed to including AHP, DEA and NN approaches to the supplier selection
solve the supplier selection problem. The long list of approaches problem. Most recently, Kokangul and Susuz (2009) integrated
includes linear programming (LP), mathematical programming AHP and mathematical programming to consider both non-linear
models, multiple-objective programming, statistical and probabi- integer and multiple-objective programming under certain con-
listic methods, data envelopment analysis (DEA), cost-based meth- straints to determine the best suppliers. The integrated model uses
ods (CBM), case-based reasoning (CBR), neural networks (NN), source data provided by a manufacturing firm to address a real-
AHP, analytic network process (ANP), fuzzy set theory, and tech- world supplier selection problem.
Table 1
Supplier selection criteria literature review.
Selection criteria 1 2 3 4 5 6 7 8 9 10
p p p p p p
Price (cost)
p p p p p p p p
Product quality
p p p p p p p
On-time delivery
p
Warranty and claims
p p
After sales service
p
Technical support/expertise
p
Attitude
p p
Total service quality
p
Training aids
p p p
Performance history
p p p p
Financial stability
p p
Location
p
Labor relations
p p
Relationship closeness
p p
Management and organization
p p p
Conflict/problem solving capability
p p
Communication system
Response to customer request
p p p
Technical capability
p p
Production capability
p
Packaging capability
p
Operational controls
p
Amount of past business
p p p p p
Reputation and position in industry
p
Reciprocal arrangements
p
Impression
p
Business attempt
p p
Maintainability
p
Size
1, Dickson (1966); 2, Evans (1980); 3, Shipley (1985); 4, Ellram (1990); 5, Weber et al. (1991); 6, Tam and Tummala (2001); 7, Pi and Low (2005); 8, Chen et al. (2006); 9, Lin
and Chang (2008); 10, Wang et al. (2009).
C.-N. Liao, H.-P. Kao / Expert Systems with Applications 38 (2011) 10803–10811 10805
8
>
> 0; x < n1 ;
>
>
>
< x n1 =n2 n1 ;
> n1 6 x 6 n2 ;
un~ ðxÞ ¼ 1; n2 6 x 6 n3 ; ð1Þ
>
>
>
> x n4 =n3 n4 ; n3 6 x 6 n4 ;
>
>
:
0; x > n4 :
x
For a trapezoidal fuzzy number n ~ ¼ ðn1 ; n2 ; n3 ; n4 Þ, when n2 = n2, the
0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1
number is called a triangular fuzzy number. A crisp number k can be
expressed as (k, k, k, k). Fig. 3. Linguistic variables for importance weight of each criterion.
10806 C.-N. Liao, H.-P. Kao / Expert Systems with Applications 38 (2011) 10803–10811
x ~ ¼ ½~r ij ;
R i ¼ 1; 2; 3; . . . m; j ¼ 1; 2; 3; . . . ; n; ð9Þ
1 2 3 4 5 6 7 8 9 10
where the ~rij is the normalized value of ~xij ¼ ðaij ; bij ; cij ; dij Þ, which be
Fig. 4. Linguistic variables for ratings. calculated as follows:
In addition, the linguistic variable ‘‘Good’’ can be represented as If the jth criterion is a benefit, then:
(7, 8, 8, 9) in Fig. 4; its membership function is: ~rij ¼ ðaij =dj ; bij =dj ; cij =dj ; dij =dj Þ; ð10Þ
8
< 0;
> x < 7;
where
dj
¼ max dij .
uGood ðxÞ ¼ x 7=8 7; 7 6 x 6 8; ð4Þ If the jth criterion is a cost, then:
>
:
1; 8 6 x 6 9:
~rij ¼ ðaj =dij ; aj =cij ; aj =bij ; aj =aij Þ; ð11Þ
Assume that a decision group has K DMs and the fuzzy ratings
of all decision maker preferences are trapezoidal fuzzy member, where aj ¼ min aij .
~ k ¼ ðak ; bk ; ck ; dk Þ, k ¼ 1; 2; . . . ; K. Then the aggregated fuzzy rating
R A weighted normalized fuzzy-decision matrix can be con-
can be defined as: structed according to the normalized fuzzy-decision matrix as
follows:
~ ¼ ða; b; c; dÞ;
R k ¼ 1; 2; . . . ; K ð5Þ
~ ¼ ½v~ ij ;
V ð12Þ
mn
where
where v~ ij ¼ x~ij w
~ j ; i ¼ 1; 2; 3; . . . m; j ¼ 1; 2; 3; . . . ; n:
X
K
After constructing a weighted normalized fuzzy-decision ma-
aij ¼ minfak g; b ¼ 1=K bK ;
k
K¼1
trix, the fuzzy positive-ideal solution (FPIS), S , and the fuzzy neg-
ative-ideal solution (FNIS), S , can be calculated as follows:
X
K
c ¼ 1=K cK ; d ¼ maxfdk g: S ¼ fðmax v~ ij jj 2 J Þ; ðmin v~ ij j 2 J 0 Þg ¼ ðv~ 1 ; v~ 2 ; . . . ; v~ n Þ;
k i i
K¼1
i ¼ 1; 2; . . . ; m; j ¼ 1; 2; 3; . . . ; n ð13Þ
Let the fuzzy rating and importance weight of the kth DM be
~
xijk ¼ ðaijk ; bijk ; cijk ; dijk Þ and w ~ jk ¼ ðw
~ jk1 ; w
~ jk2 ; w
~ jk3 ; w
~ jk4 Þ, where i ¼ and
1; 2; . . . ; m, j ¼ 1; 2; 3; . . . ; n, respectively. Therefore, the aggregated
S ¼ fðmin v~ ij jj 2 J Þ; ðmax v~ ij j 2 J 0 Þg ¼ ðv~ 1 ; v~ 2 ; . . . ; v~ n Þ;
fuzzy ratings, ~ xij ; of alternatives with respect to each criterion can i i
be calculated as (Chen et al., 2006): i ¼ 1; 2; . . . ; m; j ¼ 1; 2; 3; . . . ; n; ð14Þ
~xij ¼ ðaij ; bij ; cij ; dij Þ; ð6Þ
where v ¼ maxfv ij4 g and v ¼ minfv ij1 g. In addition, J is associ-
j
~
j
where ated with benefit criteria, while J 0 is associated with cost criteria.
The distance of each alternative from S and S can be calcu-
X
K
aij ¼ minfaijk g; bij ¼ 1=K bijk ; lated as:
k
K¼1
X
n
di ¼ dðv~ ij; v~ þj Þ; i ¼ 1; 2; . . . ; m; ð15Þ
X
K
j¼1
cij ¼ 1=K cijk ; dij ¼ maxfdijk g;
k
K¼1
X
n
~ j , of each criterion can be calcu-
and the aggregated fuzzy weights, w di ¼ dðv~ ij; v~ j Þ; i ¼ 1; 2; . . . ; m; ð16Þ
j¼1
lated as (Chen et al., 2006):
~ j ¼ ðwj1 ; wj2 ; wj3 ; wj4 Þ;
w ð7Þ where dð; Þ represents the distance measurement between two
fuzzy numbers.
where
Finally, the closeness coefficients of each supplier according to
X
K distance from the fuzzy positive-ideal solution (FPIS), S and the
wj1 ¼ minfwjk1 g; wj2 ¼ 1=K wjk2 ; fuzzy negative-ideal solution (FNIS), S , can be calculated as:
k
K¼1
CC i ¼ di =ðdi þ di Þ; i ¼ 1; 2; . . . ; m; ð17Þ
X
K
wj3 ¼ 1=K wjk3 ; wj4 ¼ maxfwjk4 g: where CC i range belongs to the closed interval [0, 1] and
k
K¼1 i ¼ 1; 2; . . . ; m.
C.-N. Liao, H.-P. Kao / Expert Systems with Applications 38 (2011) 10803–10811 10807
3. Multi-choice goal programming where the coefficients of decision variables denote product prices;
x1, x2, and x3 represents three products, and target values (e.g., 90,
Goal programming (GP) is an analytical multiple objectives 100, and 110) are three profit goals, respectively.
decision making approach designed to address decision-marking Using a MCGP method, this problem can be expressed as the
problems in which targets have been assigned to all attributes following program:
and where the decision makers are interested in minimizing the þ þ þ
Min z ¼ d1 þd1 þd2 þd2 þd3 þd3
non-achievement of a particular goal (Liao, 2009). The model can
þ
take into account many simultaneous objectives as a decision ma- s:t: 2:5x1 þ3x2 þ2x3 d1 þd1 ¼ 90b1 þ120ð1b1 Þ;
ker seeks the best solution from among a set of feasible solutions. þ
3x1 þ2x2 þx3 d2 þd2 ¼ 80b2 þ100ð1b2 Þ;
GP was first introduced by Charnes and Cooper (1961), and has þ
been further developed by Ignizio (1976), Zimmermann (1978),
3:5x1 þ3x2 þ5x3 d3 þd3 ¼ 75b3 b4 þ90b3 ð1b4 Þþ110ð1b3 Þb4 ;
Tamiz, Jones, and Romero (1998), Romero (2001), Chang (2007) x1 þx2 þx3 P 17;
and Liao (2009), and so on. x2 þx3 P 12;
Initially, the GP was expressed as follows: x2 P 5;
(GP model) þ
di ; di P 0; i ¼ 1;2;3:
X
n
Min jfi ðXÞ g i j ð18Þ þ
i¼1 where b1 ; b2 ; b3 and b4 are binary variables, and di and di are the
s:t: X 2 F ðF is a feasible setÞ; positive and negative deviations of ith goal, respectively.
This problem can be solved using the existing optimization
where fi ðXÞ is the linear function of the ith goal, and g i is the aspi- software LINGO (Schrage, 2002) to obtain the optimal solutions
ration level of the ith goal. 16:42;
ðx1 ; x2 ; x3 ; b1 ; b2 ; b3 ; b4 Þ ¼ ð15:31; 1:23;
1; 1; 0; 1Þ: From
The above minimization process can be accomplished using the these results, we see that goal G1 reaches the aspiration level 90
weighted GP (WGP) model as follows: at 90; goal G2 reaches the aspiration level 80 at 80; and goal G3
(WGP model) reaches the aspiration level 110 at 108.99.
X
n
þ
Consider the following multiple-objective decision-making
Min ðai di þ bi di Þ ð19Þ problems, modified slightly from Example 1.
i¼1
þ
s:t: f i ðXÞ þ di di ¼ g i ; i ¼ 1; 2; . . . ; n; Example 2
þ
di ; di 0; i ¼ 1; 2; . . . ; n;
Goals : ðG1 Þ 2:5x1 þ 3x2 þ 2x3 ¼ 90;
X 2 F ðF is a feasible setÞ;
ðG2 Þ 3x1 þ 2x2 þ x3 ¼ 80;
where parameters ai and bi are the weights reflecting preferential ðG3 Þ 3:5x1 þ 3x2 þ 5x3 ¼ 90:
and normalizing purposes attached to positive and negative devia-
Constraints : x1 þ x2 þ x3 17; x2 þ x3 12; x2 5:
tions of ith goal, respectively; di ¼ maxð0; g i fi ðXÞÞ and
þ
di ¼ maxð0; fi ðXÞ g i Þ are, respectively, under- and over-achieve- where the coefficients of decision variables and target values are
ments of the ith goal, fi ðXÞ and g i are defined as above in the GP defined as in Example 1.
model (Ignizio, 1976).
GP approaches have been applied to solve many real-world
problems. However, many multiple-choice aspiration levels may Again, this problem can be solved using optimization software
exist, such as ‘‘something more/higher is better’’ or ‘‘something LINGO (Schrage, 2002) to obtain the optimal solutions
0Þ: From these results, we see that goal G1
ðx1 ; x2 ; x3 Þ ¼ ð15; 17:5;
less/lower is better’’ (Chang, 2007). These typical multiple choice
GP problems cannot be solved using a traditional GP approach. reaches the aspiration level 90 at 90; goal G2 reaches the aspiration
Chang (2007) presented a MCGP method to solve these types of level 80 at 80; and goal G3 has a positive value (+15) over aspira-
problems, and it can be expressed as follows: tion level 90.
(MCGP model) According to the above examples, Example 1 is better than
Example 2 for the decision maker, as the solution to Example 1 is
X
n
þ perfectly balanced across the three goals. In other words, the more
Min ðai di þ bi di Þ ð20Þ
i¼1
the aspiration levels there are, the better are the solutions gener-
þ ated by this proposed MCGP method. This configuration forces an
s:t: f i ðXÞ di þ di ¼ g i1 or g i2 or g i3 or or g im ;
þ
optimized consensus by minimizing total deviation (Chang, 2007).
di ; di 0; i ¼ 1; 2; . . . ; n; In addition, to reduce the binary variables, the MCGP can be
X 2 F ðF is a feasible setÞ; reformulated as the following two alternative MCGP achievement
where g ij ði ¼ 1; 2; . . . ; n and j ¼ 1; 2; . . . ; mÞ is the jth aspiration le- functions (Chang, 2008).
vel of the ith goal, g ij1 g ij g ijþ1 . Other variables are defined as Type 1: ‘‘the more the better’’ case:
in WGP. X
n
þ
Below we present two examples of MCGP problem that have Min ½wi ðdi þ di Þ þ aðeþi þ ei Þ ð21Þ
i¼1
certain goals and constraints, while they cannot be solved by tradi-
þ
tional GP approaches. s:t: f i ðXÞ di þ di ¼ yi ; i ¼ 1; 2; . . . ; n; ð22Þ
yi eþi þ ei ¼ g i;max ; i ¼ 1; 2; . . . ; n ð23Þ
Example 1 g i;min 6 yi g i;max ;
þ
Goals : ðG1 Þ 2:5x1 þ 3x2 þ 2x3 ¼ 90 or 120; di ; di ; eþi ; ei 0; i ¼ 1; 2; . . . ; n;
ðG2 Þ 3x1 þ 2x2 þ x3 ¼ 80 or 100; X 2 F ðF is a feasible set; X is unrestricted in signÞ;
ðG3 Þ 3:5x1 þ 3x2 þ 5x3 ¼ 75; 90 or 110: þ
where di and di are the positive and negative deviations corre-
Constraints : x1 þ x2 þ x3 17; x2 þ x3 12; x2 5: sponding to the ith goal jfi ðXÞ yi j in Eq. (20); eþ
i and ei are the
10808 C.-N. Liao, H.-P. Kao / Expert Systems with Applications 38 (2011) 10803–10811
positive and negative deviations corresponding to jyi g i;max j in Eq. Step 4. Construct weighted normalized fuzzy-decision matrix.
(21); and ai is the weight attached to the sum of the deviation of Step 5. Determine FPIS and FNIS.
jyi g i;max j. Other variables are defined as in MCGP. Step 6. Calculate the distance of each supplier from FPIS and FNIS,
respectively.
Type 2: ‘‘the less the better’’ case:
Step 7. Calculate the closeness coefficient (CCi) of each supplier.
X
n
þ Step 8. According to the closeness coefficients obtained from Step
Min ½wi ðdi þ di Þ þ aðeþi þ ei Þ ð24Þ 7 for each supplier, build the integrated model to find the
i¼1
þ best suppliers and their optimum order quantities. In
s:t: f i ðXÞ di þ di ¼ yi ; i ¼ 1; 2; . . . ; n; ð25Þ order to find the best order quantities, the total value cre-
yi eþi þ ei ¼ g i;min ; i ¼ 1; 2; . . . ; n; ð26Þ ated from the procurement (TVP) should be maximized.
g i;min yi g i;max ;
þ The final model (FTM model) which integrates fuzzy TOPSIS and
di ; di ; eþi ; ei 0; i ¼ 1; 2; . . . ; n;
MCGP can be shown as:
X 2 F ðF is a feasible set; X is unrestricted in signÞ; Achievement functions
þ
where di and di are the positive and negative deviations corre- X
n
þ
sponding to the ith goal jfi ðXÞ yi j in Eq. (23); eþ Min ðdi þ di Þ ð27Þ
i and ei are the po-
i¼1
sitive and negative deviations corresponding to jyi g i;min j in Eq.
(24); and ai is the weight attached to the sum of the deviation of s:t:
jyi g i;min j. Other variables are defined as in MCGP.
Goal and systems constraints
X
n
þ
4. The proposed method CC i X i d1 þ d1 P g 1;min ðTVP goalÞ ð28Þ
i¼1
created from the procurement. According to Chang (2007), MCGP 6 g 2;max ðDelivery time constraintÞ ð30Þ
allows DMs to set multi-choice aspiration levels (MCAL) for each
goal (i.e., one goal mapping multiple aspiration levels) to avoid X
n
þ
underestimation or overestimation of decision making. The MCAL X i d4 þ d4 ¼ D ðDemand constraintÞ ð31Þ
on a single attribute can be seen in the following three scenarios i¼1
C1 C2 C3 C4 C5
Relationship Quality of Delivery Warranty Experience
S ¼ ½ð0:9; 0:9; 0:9; 0:9; Þ; ð0:9; 0:9; 0:9; 0:9Þ; ð1; 1; 1; 1Þ;
closeness product capabilities level time ð1; 1; 1; 1Þ; ð0:9; 0:9; 0:9; 0:9Þ;
Table 4
Fuzzy decision-matrix and fuzzy weights of four candidates.
C1 C2 C3 C4 C5
S1 (7, 8, 8, 9) (5, 7, 8, 10) (5, 8, 9, 10) (8, 9, 10, 10) (7, 8.7, 9.3, 10)
S2 (5, 6.7, 7.3, 9) (7, 8, 8, 9) (7, 8, 8, 9) (7, 8, 8, 9) (7, 8, 8, 9)
S3 (8, 8.7, 9.3, 10) (8, 9, 10, 10) (5, 6, 7, 8) (7, 8.3, 8.7, 10) (5, 6, 7, 8)
S4 (7, 8, 8, 9) (5, 7.7, 8.3, 10) (5, 6.7, 7.3, 9) (7, 8, 8, 9) (5, 6.7, 7.3, 9)
Weights (0.7, 0.8, 0.8, 0.9) (0.7, 0.8, 0.8, 0.9) (0.7, 0.9, 1.0, 1.0) (0.7, 0.87, 0.93, 1.0) (0.7, 0.8, 0.8, 0.9)
Table 5
Normalized fuzzy decision-matrix.
C1 C2 C3 C4 C5
S1 (0.7, 0.8, 0.8, 0.9) (0.5, 0.7, 0.8, 1) (0.5, 0.8, 0.9, 1) (0.8, 0.9, 1, 1) (0.7, 0.87, 0.93, 1)
S2 (0.5, 0.67, 0.73, 0.9) (0.7, 0.8, 0.8, 0.9) (0.7, 0.8, 0.8, 0.9) (0.7, 0.8, 0.8, 0.9) (0.7, 0.8, 0.8, 0.9)
S3 (0.8, 0.87, 0.93, 1) (0.8, 0.9, 1, 1) (0.5, 0.6, 0.7, 0.8) (0.7, 0.83, 0.87, 1) (0.5, 0.6, 0.7, 0.8)
S4 (0.7, 0.8, 0.8, 0.9) (0.5, 0.77, 0.83, 1) (0.5, 0.67, 0.73, 0.9) (0.7, 0.8, 0.8, 0.9) (0.5, 0.67, 0.73, 0.9)
Table 6
Weighted normalized fuzzy decision-matrix.
C1 C2 C3 C4 C5
S1 (0.49, 0.64, 0.64, 0.81) (0.35, 0.56, 0.64, 0.9) (0.35, 0.72, 0.9, 1) (0.56, 0.78, 0.93, 1) (0.49, 0.69, 0.75, 0.9)
S2 (0.35, 0.53, 0.59, 0.81) (0.49, 0.64, 0.64, 0.81) (0.49, 0.72, 0.8, 0.9) (0.49, 0.69, 0.75, 0.9) (0.49, 0.64, 0.64, 0.81)
S3 (0.56, 0.69, 0.75, 0.9) (0.56, 0.72, 0.8, 0.9) (0.35, 0.54, 0.7, 0.8) (0.49, 0.72, 0.81, 1) (0.35, 0.48, 0.56, 0.72)
S4 (0.49, 0.64, 0.64, 0.81) (0.35, 0.61, 0.67, 0.9) (0.35, 0.6, 0.73, 0.9) (0.49, 0.69, 0.75, 0.9) (0.35, 0.53, 0.59, 0.81)
þ þ þ þ
Table 7 Min z ¼ d1 þ d1 þ d2 þ d2 þ d3 þ d3 þ d4 þ d4 þ eþ1 þ e1 þ eþ2 þ e2 þ eþ3 þ e3
Distances between FPIS and supplier ratings. þ
s:t: 0:558x1 þ 0:502x2 þ 0:516x3 þ 0:476x4 d1 þ d1 P 3500
C1 C2 C3 C4 C5 ðTVP goal; the more the betterÞ
þ
dðS1 ; S Þ 0.28 0.35 0.36 0.25 0.24 12x1 þ 9x2 þ 15x3 þ 6x4 d2 þ d2 ¼ y1
dðS2 ; S Þ 0.37 0.28 0.31 0.33 0.28
ðprocurement cost; the less the betterÞ
dðS3 ; S Þ 0.21 0.20 0.44 0.31 0.40
dðS4 ; S Þ 0.28 0.33 0.41 0.33 0.37 y1 eþ1 þ e1 ¼ 46000 for jy1 g 1;min j
46000 y1 53200 for bound of y1
þ
2:5x1 þ 4x2 þ 6x3 þ 3x4 d3 þ d3 ¼ y2 for delivery time goal
y2 eþ2 þ e2 ¼ 4 for jy2 g 2;min j
4 6 y2 7 for bound of y2
þ
Table 8 x1 þ x2 þ x3 þ x4 d4 þ d4 5000 for procurement level
Distances between FNIS and supplier ratings. x1 2700 for the capacity bound of S1
C1 C2 C3 C4 C5 x2 3500 for the capacity bound of S2
x3 2300 for the capacity bound of S3
dðS1 ; S Þ 0.32 0.33 0.46 0.37 0.39
dðS2 ; S Þ 0.27 0.32 0.41 0.26 0.32 x4 3100 for the capacity bound of S4
dðS3 ; S Þ 0.39 0.41 0.30 0.32 0.22 xi P 0; i ¼ 1; 2; 3; 4;
dðS4 ; S Þ 0.32 0.34 0.36 0.26 0.27 þ þ þ þ
d1 ; d1 ; d2 ; d2 ; d3 ; d3 ; d4 ; d4 ; eþ1 ; e1 ; eþ2 ; e2 0:
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