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A vendor selection model is a structured framework that helps
businesses evaluate potential vendors.
- Find a vendor evaluation method to facilitate an objective, unbiased selection process
- Identify the key metrics of vendor performance that can help during negotiation with vendors on specific points
- Find a robust framework that can measure vendors’ performance
- Analytic hierarchy process (AHP) is a prominent approach in solving multi-criterion decision-making problems.
- The method allows the incorporation of judgements on intangible qualitative criteria alongside tangible quantitative criteria.
- Helped avoid conflicts through collaborative decision making
- Generated a repeatable process that saves time
- Measured vendor performance among peers and across time
1.Defining and ordering criteria
2. Evaluating vendors and selecting the best one
Criteria | Local weights | Sub-criteria | Local weights | Combined weights | Ranks |
Capability | 26.2% | Quantity | 33.2% | 8.7% | 4 |
Standards | 38.2% | 10.0 % | 1 | ||
Delivery network | 28.5% | 7.5% | 8 | ||
Process | 21.9% | Management and organisatoin | 30.6% | 6.7% | 10 |
Automation | 39.3% | 8.6% | 5 | ||
Delivery lead time | 30.2% | 6.6% | 11 | ||
Packaging | 18.5% | SKU packaging | 49.3% | 9.1% | 3 |
Delivery packaging | 50.7% | 9.4% | 2 | ||
Pricing | 17.6% | Margin cost | 36.7% | 6.5% | 12 |
Minimum order quantity | 38.9% | 6.9% | 9 | ||
Credit period | 24.4% | 4.3% | 13 | ||
Quality | 15.7% | Product quality | 50.0% | 7.9% | 6 |
Hygiene | 50.0% | 7.9% | 6 |
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