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Summary

In todays competitive business world, it is extremely important for decision makers to have access to decision support tools in order to make quick, right and accurate decisions. One of these decision making areas is supplier selection in procurement. Supplier selection is a multi-criteria decision making problem that deals with the optimization of conflicting objectives such as quality, cost, and delivery time. In spite of the fact that the term supplier selection is commonly used in the literature, and many methods and models have been designed to help decision makers, few efforts have been dedicated to develop a system based on any of these methods. In this project, a supplier selection system is used based on the analytic hierarchy process (AHP) method which has been commonly used for multi-criteria decision making problems. Analytic hierarchy process is a method in which a large system is broken down into its component parts so as to minimize the complexity. This is the basis of the analytic hierarchy process.

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Objective
Objective:
To develop a Supplier Selection system for Acoustics India Private Limited, Trichy.

Supplier Selection System


In today's competitive environment, most companies are trying to reduce their supplier base. By means of reducing the supplier base, a company can pay more attention on few suppliers leading to good supplier relationship. By means of properly selecting the suppliers, the current supplier base is reduced and the company can focus on few suppliers, leading to competitive advantage. By means of a rationalized supplier base, most processes between the customer and the supplier are standardized leading to better efficiency in the purchasing process. Vendor rating is result of a formal vendor evaluation system. Vendor rating system provide for measuring those factors that add value to the firm through value addition or decreased cost.

Benefits of Vendor Rating System:


Helping minimize subjectivity in judgment and make it possible to consider all relevant criteria in assessing suppliers. Providing feedback from all areas in one package. Facilitating better communication with vendors. Providing overall control of the vendor base. Establishing continuous review standards for vendors, thus ensuring continuous improvement of vendor performance. Developing a performance based culture.

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Analytic Hierarchy Process

Analytic Hierarchy Process


The AHP is a popular technique often used to model subjective decision-making processes based on multiple attributes, which was developed by Saaty in 1971. Analytic Hierarchy Process (AHP), since its invention, has been a tool at the hands of decision makers and researchers, and it is one of the most widely used multiple criteria decision-making tools. The first step in the process of supplier selection using analytic hierarchy process is to define the various supplier selection criteria (Saaty, 1980). These criteria are the order winning criteria that have to be met by the potential suppliers in order to enter the contract. The context of supplier selection in this project deals with the selection raw material suppliers of acoustics noise control products manufacturer, Acoustics India Private Limited. The various supplier selection criteria for this scenario are listed below: a) Quality - Certification, manufacturing/process capability, and quality history. b) Service - Service network, spares availability, and warranty. c) Delivery - Rush order, lead-time, and on-time delivery The AHP divides complex decision problems into a hierarchical system of decision elements. A pairwise comparison matrix of these elements is constructed, and then the normalized principal eigenvector is calculated for the priority vector, which provides a measure of relative importance (weight) of each element. Analytic hierarchy process will yield a good result only if the pair-wise comparison matrix is developed properly. For this purpose, sufficient amount of data regarding the various criteria should be available The evaluation method of this model is based on relative performance measure for each supplier for subjective (qualitative) criteria which is obtained by quantifying the ratings expressed in quantitative terms. The supplier who has the maximum score is selected.

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Acoustics India Private Limited


Company Name: Acoustics India Private Limited Established: 1988 Registered office: K.K.Nagar, Trichy Factory: Mathur, Pudukottai Type: Manufacturer Turnover: 25 cr Accreditations: ISO 9001:2004 NB Stamp R Stamp U Stamp

PROFILE

Achievements: Produced world largest stream vent silencers weighing 20000kgs for M/S Taichung Power Company, Taiwan Major Customers: Tata Steel, SAIL, BHEL, TNEB, KSEB, GAIL, ONGC, RIL, Ranbaxy laboratories, Ultra Tech Cements etc. Websites: www.acousticsind.com

Established player in the field of industrial noise control with over two decades of experience. Over 3000 installations in a variety of industries which include steel, power, engineering, fertilizers, oil, and chemical industries. Specialized in wide range of noise control products. State of the art computerized design facilities for complex noise problem.

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Acoustics India Private Limited


Acoustic Enclosures

PRODUCTS

Silencers

Sound Proof Cabins

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Acoustics India Private Limited


Compressor Test Beds

PRODUCTS

Pressure Vessels

Heat Exchangers

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Acoustics India Private Limited

ACCREDIATIONS

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Acoustics India Private Limited

ACCREDIATIONS

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Acoustics India Private Limited


Steel & Power

Customer List
Chemical & Fertilizers

Engineering

Oil / Petro Chemical


Tata Steel IISCO SAIL Visag/Bokaro/Bhilai Steel Jindal/Durgapur Steel JSPL BHEL HYD/HWR/BPL NTPC MSEB/KSEB/TNEB Korea Heavy Industries Alstom Projects BSES Deutsche Babcock Thermax Babcock Mitsui Babcock IJT Torrent Power ESSAR Steel Mono Steel METSO Power Belleli Energy Deutz Mazagon Dock Stewards & Llyods GIPCL Hindalco INOX AIR Products BGR Energy Caterpillar DF Power Systems TD Power Systems

EIL RIL BECHTEL Andrew Yule & Co Linde/BOC India L&T/L&T MHI UHDE/UHDE GMBH Technimont ICB BHPV SABIC KTI MECON Indian Railways Howden India Siemens Atlas Copco Air Liquide Thyssen Krupp Industries Praxair India Pvt Ltd Copes-Vulcan Jubail Chemicals Ansaldo Caldaie Boilers Tata Motors Limited SPX Process Equipment Downer Energy Systems GALFAR Engineering PDO TOPS Technologies / CTCI

FEDO HFCL CFCL SPIC RCFL MFL EID Parry GNFC Indo-Gulf IFFCO GFCL GSFC Ultra Tech Cements Heidelberg Cements MCSC FLSmidth Jubilant Organosys Ranbaxy Laboratories Sudha Agro Shree Cements Saurashtra Chemicals

GAIL KRL HPCL BPCL BRPL MRPL ONGC RIL IOCL ESSAR Oil Quippo Infrastructure Adyard Abu Dhabi PetroFac International Southern Petrochemical Haldia Petrochemicals Heurtey Petrochemicals Numaligarh Refinery

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SUPPLIER SELECTION SYSTEM USING ANALYTICAL HIERARCHY PROCESS

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Analytic Hierarchy Process


The Analytical hierarchy process (AHP) is a quantitative method for ranking decision alternatives and selecting the best one when the decision maker has multiple criteria. It answers the question, which one? . The decision maker will select the alternatives that best meets his or her criteria. AHP is a process for developing a numerical score to rank each decision alternative based on how well each alternative meets the decision makers criteria. In this project, it is demonstrated how AHP can be used to select a companys supplier. The possible criteria that Acoustics India Private Limited considers when selecting a supplier are quality, price and delivery. The mathematical process used in AHP is to first establish preferences for each supplier for each criterion. Next is to determine the preferences for the criteria - that is, which of the criteria is the most important, which is the next most important and so on. In AHP, preferences between alternatives are determined by making pair-wise comparisons. In a pair-wise comparison the decision maker examines two alternatives according to one criterion and indicates a preference. These comparisons are made using a preference scale, which assigns numerical value to different levels of preference. The standard preference scale used for AHP is given briefly. This scale has been determined by experienced researchers in AHP to be a reasonable basis for comparing two alternatives. Once AIPLs pair-wise comparisons ratings for each supplier for each of the three criterions for material are summarized, the next step is to prioritize the suppliers within each criterion. This means the company wants to determine which is the most preferred supplier, the second most preferred supplier and the third most preferred suppliers within each of the three criteria. This step referred to as systhesization is mathematically complex but we can employ an approximation method that provides a reasonably good estimate of preference scores. The first step is to sum the value in each column of the pair-wise comparison matrix. Next the values in each column are divided by the corresponding column sums. (Notice that the values in each column sum to 1). Next the in each row are averaged. These row averages provides the AIPL with their preferences for each criterion. The next step is to rank criteria in order of importance. This is accomplished in the same way the suppliers were ranked within each criterion previously, by using pair-wise comparison. The values in each column in the matrix are summed; the column values are divided by their corresponding column sums and the rows are averaged, resulting in a matrix. The preference vector for the criteria consists of the row averages.
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Finally an overall score for each supplier is computed by multiplying the matrix summarizing the companys preference for each supplier for each criterion by the preference vector for the three criteria. The suppliers and their corresponding scores are summarized. Based on their scores, supplier with the highest score should be selected for supply. Analytic hierarchy process will yield a good result only if the pair-wise comparison matrix is developed properly. For this purpose, sufficient amount of data regarding the various criteria should be available.

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Standard Preference Table

PREFERENCE LEVEL Equally Preferred Equally To Moderately Preferred Moderately Preferred Moderately To Strongly Preferred Strongly Preferred Strongly To Very Strongly Preferred Very Strongly Preferred Very Strongly To Extremely Preferred Extremely Preferred

NUMERICAL VALUE 1 2 3 4 5 6 7 8 9

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AHP process
SUPPLIER LIST Flow Care Industries Ltd. Chennai. - A R.D Forge Industries Ltd. Ghaziabad. - B C.D. Industries Ltd.Ghaziabad.- C CRITERIA Quality Price Delivery MATERIALS 1. 2. 3. 4. 5. 6. 7. 8. Studs Nuts Flanges SS Plates Angle & Flat Seamless ERW Pipes Valves Wire Mesh Wool

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MATERIAL: STUD&NUT

THE PAIR-WISE COMPARISON MATRICES FOR EACH OF THE THREE CRITERIA ARE SUMMARIZED BELOW: Quality B C 1 5 1 5 1/5 1 PRICE B C 1 1 1 1

SUPPLIERS A B C SUPPLIERS A B C SUPPLIERS A B C

A 1 1 1/5 A 1 4 4

DELIVERY A B C 1 1 1/5 1 1 1/5 5 5 1

THE PRIORITIZED DECISION CRITERIA ACCORDING TO THE COMPARISONS IS SUMMARIZED BELOW CRITERIA Quality Price Delivery Quality 1 1/5 1/3 Price 5 1 5 Delivery 3 1/5 1

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DEVELOPING MATRICES AND PERFERENCE VECTORS FOR ALL THE PAIR-WISE COMPARISON MATRICES FOR CRITERIA Quality C 0.4545 0.4545 0.0909

Suppliers A B C

A 0.4545 0.4545 0.0909

B 0.4545 0.4545 0.0909

Row Total 1.3635 1.3635 0.2727

Row Average 0.4545 0.4545 0.0909 1.0000

Price Suppliers A B C A 0.1111 0.4444 0.4444 B 0.1111 0.4444 0.4444 C 0.1111 0.4444 0.4444 Row Total 0.3333 1.3332 1.3332 Row Average 0.1111 0.4444 0.4444 1.0000

Suppliers A B C

A 0.1429 0.1429 0.7142

Delivery B C 0.1429 0.1429 0.1429 0.1429 0.7142 0.7142

Row Total 0.4287 0.4287 2.1426

Row Average 0.1429 0.1429 0.7142 1.0000

THE PERFERENCE VECTOR ARE SUMMARIZED IN THE FOLLOWING MATRIX CRITERION SUPPLIERS QUALITY PRICE A 0.4545 0.1111 B 0.4545 0.4444 C 0.0909 0.4444

DELIVERY 0.1429 0.1429 0.7142

RANKING THE CRITERIA CRITERIA Quality Price Delivery Quality 0.6522 0.1304 0.2174 Price 0.4545 0.0909 0.4545 Delivery 0.7143 0.0476 0.2381 Row Total 1.8210 0.2689 0.9100 Row Average 0.6070 0.0897 0.3033 1.0000

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THE PERFERENCE VECTOR FOR THE CRITERIA IS CRITERIA QUAILTY PRICE DELIVERY SCORE 0.6070 0.0897 0.3033

DEVELOPING AN OVERALL RANKING MATRIX MULTIPLICATION QUAILTY QUAILTY PRICE DELIVERY 0.6070 0.0897 0.3033 X A B C 0.4545 0.4545 0.0909 PRICE 0.1111 0.4444 0.4444 DELIVERY 0.1429 0.1429 0.7142

SUPPLIERS A B C Quality 0.2759 0.2759 0.0552 0.6070

CRITERIA Price 0.0099 0.0399 0.0399 0.0897

SCORE Delivery 0.0433 0.0433 0.2166 0..3033 0.3292 0.3591 0.3117 1.0000

Supplier B-R.D Forge Industries Ltd. should be chosen for supply of stud & nut.

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MATERIAL: FLANGE

THE PAIR-WISE COMPARISON MATRICES FOR EACH OF THE THREE CRITERIA ARE SUMMARIZED BELOW: Quality B C 2 2 1 1 1 1 PRICE B C 1/5 1/3 1 3 1/3 1

SUPPLIERS A B C SUPPLIERS A B C SUPPLIERS A B C

A 1 A 1 5 3

DELIVERY A B C 1 1/6 6 1 3 4 1/3 1

THE PRIORITIZED DECISION CRITERIA ACCORDING TO THE COMPARISONS IS SUMMARIZED BELOW CRITERIA Quality Price Delivery Quality 1 1/5 1/3 Price 5 1 5 Delivery 3 1/5 1

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DEVELOPING MATRICES AND PERFERENCE VECTORS FOR ALL THE PAIR-WISE COMPARISON MATRICES FOR CRITERIA Quality C 0.5000 0.2500 0.2500

Suppliers A B C

A 0.5000 0.2500 0.2500

B 0.5000 0.2500 0.2500

Row Total 1.5000 0.7500 0.7500

Row Average 0.5000 0.2500 0.2500 1.0000

Price Suppliers A B C A 0.1111 0.5556 0.3333 B 0.1304 0.6522 0.2174 C 0.0769 0.6923 0.2308 Row Total 0.3184 1.9001 0.7815 Row Average 0.1061 0.6334 0.2605 1.0000

Suppliers A B C

A 0.0909 0.5455 0.3636

Delivery B C 0.1111 0.0588 0.6667 0.7059 0.2222 0.2353

Row Total 0.2608 1.9181 0.8211

Row Average 0.0869 0.6394 0.2737 1.0000

THE PERFERENCE VECTOR ARE SUMMARIZED IN THE FOLLOWING MATRIX CRITERION SUPPLIERS QUALITY PRICE A 0.5000 0.1061 B 0.2500 0.6334 C 0.2500 0.2605

DELIVERY 0.0869 0.6394 0.2737

RANKING THE CRITERIA CRITERIA Quality Price Delivery Quality 0.6522 0.1304 0.2174 Price 0.4545 0.0909 0.4545 Delivery 0.7143 0.0476 0.2381 Row Total 1.8210 0.2689 0.9100 Row Average 0.6070 0.0897 0.3033 1.0000

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THE PERFERENCE VECTOR FOR THE CRITERIA IS CRITERIA QUAILTY PRICE DELIVERY SCORE 0.6070 0.0897 0.3033

DEVELOPING AN OVERALL RANKING QUAILTY QUAILTY PRICE DELIVERY 0.6070 0.0897 0.3033 X A B C 0.5000 0.2500 0.2500 PRICE 0.1061 0.6334 0.2605 DELIVERY 0.0869 0.6394 0.2737

SUPPLIERS A B C Quality 0.3034 0.1518 0.1518 0.6070

CRITERIA Price 0.0095 0.0568 0.0234 0.0897

SCORE Delivery 0.0265 0.1938 0.0830 0..3033 0.3394 0.4024 0.2582 1.0000

Supplier B-R.D.Forge Industries Ltd. should be chosen for supply of Flange.

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MATERIAL: SS PLATES

THE PAIR-WISE COMPARISON MATRICES FOR EACH OF THE THREE CRITERIA ARE SUMMARIZED BELOW: Quality B C 1/3 1 2 1 PRICE B C 1/6 1 1/2 2 1

SUPPLIERS A B C SUPPLIERS A B C SUPPLIERS A B C

A 1 4 3 A 1 4 6

DELIVERY A B C 1 2 3 1 2 1/3 1

THE PRIORITIZED DECISION CRITERIA ACCORDING TO THE COMPARISONS IS SUMMARIZED BELOW CRITERIA Quality Price Delivery Quality 1 1/5 1/3 Price 5 1 5 Delivery 3 1/5 1

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DEVELOPING MATRICES AND PERFERENCE VECTORS FOR ALL THE PAIR-WISE COMPARISON MATRICES FOR CRITERIA Quality B C 0.1429 0.1000 0.5714 0.6000 0.2857 0.3000

Suppliers A B C

A 0.1250 0.5000 0.3750

Row Total 0.3679 1.6714 0.9607

Row Average 0.1227 0.5571 0.3202 1.0000

Price Suppliers A B C A 0.0909 0.3636 0.5455 B 0.0769 0.3077 0.6154 C 0.1000 0.3000 0.6000 Row Total 0.2678 0.9713 1.6714 Row Average 0.0893 0.3237 0.5870 1.0000

Suppliers A B C

A 0.5455 0.2727 0.1818

Delivery B C 0.5714 0.5000 0.2857 0.3333 0.1429 0.1667

Row Total 1.6169 0.8917 0.4917

Row Average 0.5390 0.2972 0.1638 1.0000

THE PERFERENCE VECTOR ARE SUMMARIZED IN THE FOLLOWING MATRIX CRITERION SUPPLIERS QUALITY PRICE A 0.1227 0.0893 B 0.5571 0.3237 C 0.3202 0.5870

DELIVERY 0.5390 0.2972 0.1638

RANKING THE CRITERIA CRITERIA Quality Price Delivery Quality 0.6522 0.1304 0.2174 Price 0.4545 0.0909 0.4545 Delivery 0.7143 0.0476 0.2381 Row Total 1.8210 0.2689 0.9100 Row Average 0.6070 0.0897 0.3033 1.0000

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THE PERFERENCE VECTOR FOR THE CRITERIA IS CRITERIA QUAILTY PRICE DELIVERY SCORE 0.6070 0.0897 0.3033

DEVELOPING AN OVERALL RANKING MATRIX MULTIPLICATION QUAILTY QUAILTY PRICE DELIVERY 0.6070 0.0897 0.3033 X A B C 0.1227 0.5571 0.3202 PRICE 0.0893 0.3237 0.5870 DELIVERY 0.5390 0.2972 0.1638

SUPPLIERS A B C Quality 0.0745 0.3582 0.1943 0.6070

CRITERIA Price 0.0080 0.0290 0.0527 0.0897

SCORE Delivery 0.1635 0.0900 0.0498 0..3033 0.2460 0.4572 0.2968 1.0000

Supplier B-R.D Forge Industries Ltd. should be chosen for supply of SS Plates.

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MATERIAL: ANGLE & FLAT

THE PAIR-WISE COMPARISON MATRICES FOR EACH OF THE THREE CRITERIA ARE SUMMARIZED BELOW: Quality B C 1 1 1 1 1 1 PRICE B C 1/3 1 2 1

SUPPLIERS A B C SUPPLIERS A B C SUPPLIERS A B C

A 1 1 1 A 1 3 4

DELIVERY A B C 1 2 1 1/2 1 1/2 1 2 1

THE PRIORITIZED DECISION CRITERIA ACCORDING TO THE COMPARISONS IS SUMMARIZED BELOW CRITERIA Quality Price Delivery Quality 1 1/7 1/5 Price 7 1 1/3 Delivery 5 3 1

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DEVELOPING MATRICES AND PERFERENCE VECTORS FOR ALL THE PAIR-WISE COMPARISON MATRICES FOR CRITERIA Quality C 0.3333 0.3333 0.3333

Suppliers A B C

A 0.3333 0.3333 0.3333

B 0.3333 0.3333 0.3333

Row Total 1.0000 1.0000 1.0000

Row Average 0.3333 0.3333 0.3333 1.0000

Price Suppliers A B C A 0.1250 0.3750 0.5000 B 0.1000 0.3000 0.6000 C 0.1429 0.2857 0.5714 Row Total 0.3679 0.9607 1.6714 Row Average 0.1226 0.3202 0.5572 1.0000

Suppliers A B C

A 0.4000 0.2000 0.4000

Delivery B C 0.4000 0.4000 0.2000 0.2000 0.4000 0.4000

Row Total 1.2000 0.6000 1.2000

Row Average 0.4000 0.2000 0.4000 1.0000

THE PERFERENCE VECTOR ARE SUMMARIZED IN THE FOLLOWING MATRIX CRITERION SUPPLIERS QUALITY PRICE A 0.3333 0.1226 B 0.3333 0.3202 C 0.3333 0.5572

DELIVERY 0.4000 0.2000 0.4000

RANKING THE CRITERIA CRITERIA Quality Price Delivery Quality 0.7447 0.1064 0.1489 Price 0.8400 0.1200 0.0400 Delivery 0.5556 0.3333 0.1111 Row Total 2.1403 0.5597 0.3000 Row Average 0.7134 0.1866 0.1000 1.0000

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THE PERFERENCE VECTOR FOR THE CRITERIA IS CRITERIA QUAILTY PRICE DELIVERY SCORE 0.7134 0.1866 0.1000

DEVELOPING AN OVERALL RANKING MATRIX MULTIPLICATION QUAILTY QUAILTY PRICE DELIVERY 0.7134 0.1866 0.1000 X A B C 0.3333 0.3333 0.3333 PRICE 0.1226 0.3207 0.5572 DELIVERY 0.4000 0.2000 0.4000

SUPPLIERS A B C Quality 0.2378 0.2378 0.2378 0.7134

CRITERIA Price 0.0229 0.0597 0.1040 0.1866

SCORE Delivery 0.0400 0.0200 0.0400 0.1000 0.3007 0.3175 0.3818 1.0000

Supplier C - C.D. Industries Ltd. should be chosen for supply of Angle flat.

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MATERIAL: SEAMLESS ERW PIPES

THE PAIR-WISE COMPARISON MATRICES FOR EACH OF THE THREE CRITERIA ARE SUMMARIZED BELOW: Quality B C 1 5 1 5 1/5 1 PRICE B C 6 3 1 1/6 6 1

SUPPLIERS A B C SUPPLIERS A B C SUPPLIERS A B C

A 1 1 1/5 A 1 1/6 1/3

DELIVERY A B C 1 5 1/3 1/5 1 1/2 3 2 1

THE PRIORITIZED DECISION CRITERIA ACCORDING TO THE COMPARISONS IS SUMMARIZED BELOW CRITERIA Quality Price Delivery Quality 1 1/7 1/5 Price 7 1 1/3 Delivery 5 3 1

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DEVELOPING MATRICES AND PERFERENCE VECTORS FOR ALL THE PAIR-WISE COMPARISON MATRICES FOR CRITERIA Quality B C 0.4545 0.4545 0.4545 0.4545 0.0909 0.0909

Suppliers A B C

A 0.4545 0.4545 0.0909

Row Total 1.3635 1.3635 0.2727

Row Average 0.4545 0.4545 0.0909 1.0000

Price Suppliers A B C A 0.6667 0.1111 0.2222 B 0.4615 0.0710 0.4615 C 0.7200 0.0400 0.2400 Row Total 1.8482 0.2281 0.9237 Row Average 0.6161 0.0760 0.3079 1.0000

Suppliers A B C

A 0.2351 0.0476 0.7143

Delivery B C 0.6250 0.1818 0.1250 0.2727 0.3750 0.5455

Row Total 1.0449 0.2281 1.5098

Row Average 0.3483 0.1484 0.5033 1.0000

THE PERFERENCE VECTOR ARE SUMMARIZED IN THE FOLLOWING MATRIX CRITERION SUPPLIERS QUALITY PRICE A 0.4545 0.6161 B 0.4545 0.0760 C 0.0909 0.3079

DELIVERY 0.3483 0.1484 0.5033

RANKING THE CRITERIA CRITERIA Quality Price Delivery Quality 0.7447 0.1064 0.1489 Price 0.8400 0.1200 0.0400 Delivery 0.5556 0.3333 0.1111 Row Total 2.1403 0.5597 0.3000 Row Average 0.7134 0.1866 0.1000 1.0000
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THE PERFERENCE VECTOR FOR THE CRITERIA IS CRITERIA QUAILTY PRICE DELIVERY SCORE 0.7134 0.1866 0.1000

DEVELOPING AN OVERALL RANKING MATRIX MULTIPLICATION QUAILTY QUAILTY PRICE DELIVERY 0.7134 0.1866 0.1000 X A B C 0.4545 0.4545 0.0909 PRICE 0.6161 0.0760 0.3079 DELIVERY 0.3483 0.1484 0.5033

SUPPLIERS A B C Quality 0.3242 0.3242 0.0648

CRITERIA Price 0.1150 0.0143 0.0575

SCORE Delivery 0.0348 0.0148 0.0503 0.4750 0.3533 0.1727 1.0000

Supplier A - Flow Care Industries Ltd. should be chosen for supply of Seamless ERW Pipes.

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MATERIAL: VALVES

THE PAIR-WISE COMPARISON MATRICES FOR EACH OF THE THREE CRITERIA ARE SUMMARIZED BELOW: Quality B C 1 1/3 1 1/3 3 1 PRICE B C 6 1 1/7 7 1

SUPPLIERS A B C SUPPLIERS A B C SUPPLIERS A B C

A 1 1 3 A 1 1/6 2

DELIVERY A B C 1 3 1/3 1/3 1 1/5 3 5 1

THE PRIORITIZED DECISION CRITERIA ACCORDING TO THE COMPARISONS IS SUMMARIZED BELOW CRITERIA Quality Price Delivery Quality 1 1/9 1/7 Price 9 1 1/5 Delivery 7 5 1

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DEVELOPING MATRICES AND PERFERENCE VECTORS FOR ALL THE PAIR-WISE COMPARISON MATRICES FOR CRITERIA Quality B C 0.2000 0.2000 0.2000 0.2000 0.6000 0.6000

Suppliers A B C

A 0.2000 0.2000 0.6000

Row Total 0.6000 0.6000 1.8000

Row Average 0.2000 0.2000 0.6000 1.0000

Price Suppliers A B C A 0.3158 0.0526 0.6316 B 0.4286 0.0714 0.5000 C 0.3043 0.0870 0.6087 Row Total 1.0487 0.2110 1.7403 Row Average 0.3486 0.0703 0.5801 1.0000

Suppliers A B C

A 0.2308 0.0769 0.6923

Delivery B C 0.3333 0.2174 0.1111 0.1304 0.5556 0.6522

Row Total 0.7815 0.3184 1.9001

Row Average 0.2605 0.1061 0.6334 1.0000

THE PERFERENCE VECTOR ARE SUMMARIZED IN THE FOLLOWING MATRIX CRITERION SUPPLIERS QUALITY PRICE A 0.2000 0.3486 B 0.2000 0.0703 C 0.6000 0.5801

DELIVERY 0.2605 0.1061 0.6334

RANKING THE CRITERIA CRITERIA Quality Price Delivery Quality 0.7975 0.0886 0.1139 Price 0.8824 0.0980 0.0196 Delivery 0.5385 0.3846 0.0769 Row Total 2.2184 0.5712 0.2104 Row Average 0.7395 0.1904 0.0701 1.0000
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THE PERFERENCE VECTOR FOR THE CRITERIA IS CRITERIA QUAILTY PRICE DELIVERY SCORE 0.7395 0.1904 0.0701

DEVELOPING AN OVERALL RANKING MATRIX MULTIPLICATION QUAILTY QUAILTY PRICE DELIVERY 0.7395 0.1904 0.0701 X A B C 0.2000 0.2000 0.6000 PRICE 0.3496 0.1061 0.6334 DELIVERY 0.2605 0.1061 0.6334

SUPPLIERS A B C Quality 0.1479 0.1479 0.4437

CRITERIA Price 0.0666 0.0134 0.1104

SCORE Delivery 0.0183 0.0074 0.0444 0.2328 0.1687 0.5985 1.0000

Supplier C - C.D. Industries Ltd. should be chosen for supply of Valves.

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MATERIAL: WIREMESH

THE PAIR-WISE COMPARISON MATRICES FOR EACH OF THE THREE CRITERIA ARE SUMMARIZED BELOW: Quality B C 1 2 1 2 1 PRICE B C 1/6 1 1/5 5 1

SUPPLIERS A B C SUPPLIERS A B C SUPPLIERS A B C

A 1 1 A 1 2 6

DELIVERY A B C 1 4 1/5 1 1/7 5 7 1

THE PRIORITIZED DECISION CRITERIA ACCORDING TO THE COMPARISONS IS SUMMARIZED BELOW CRITERIA Quality Price Delivery Quality 1 1/9 1/7 Price 9 1 1/5 Delivery 7 5 1

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DEVELOPING MATRICES AND PERFERENCE VECTORS FOR ALL THE PAIR-WISE COMPARISON MATRICES FOR CRITERIA Quality B C 0.4000 0.4000 0.4000 0.4000 0.2000 0.2000

Suppliers A B C

A 0.4000 0.4000 0.2000

Row Total 1.2000 1.2000 0.6000

Row Average 0.4000 0.4000 0.2000 1.0000

Price Suppliers A B C A 0.1111 0.2222 0.6667 B 0.0769 0.1538 0.7692 C 0.1210 0.1464 0.7317 Row Total 0.3100 0.5224 2.1676 Row Average 0.1034 0.1741 0.7225 1.0000

Suppliers A B C

A 0.1600 0.0400 0.8400

Delivery B C 0.3333 0.1489 0.0833 0.1069 0.5833 0.7447

Row Total 0.6422 0.2297 2.1280

Row Average 0.2141 0.0766 0.7093 1.0000

THE PERFERENCE VECTOR ARE SUMMARIZED IN THE FOLLOWING MATRIX CRITERION SUPPLIERS QUALITY PRICE A 0.4000 0.1034 B 0.4000 0.1741 C 0.2000 0.7225

DELIVERY 0.2141 0.0766 0.7093

RANKING THE CRITERIA CRITERIA Quality Price Delivery Quality 0.7975 0.0886 0.1139 Price 0.8824 0.0980 0.0196 Delivery 0.5385 0.3846 0.0769 Row Total 2.2184 0.5712 0.2104 Row Average 0.7395 0.1904 0.0701 1.0000
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THE PERFERENCE VECTOR FOR THE CRITERIA IS CRITERIA QUAILTY PRICE DELIVERY SCORE 0.7395 0.1904 0.0701

DEVELOPING AN OVERALL RANKING MATRIX MULTIPLICATION QUAILTY QUAILTY PRICE DELIVERY 0.7395 0.1904 0.0701 X A B C 0.4000 0.4000 0.2000 PRICE 0.1034 0.1741 0.7225 DELIVERY 0.2141 0.0766 0.7093

SUPPLIERS A B C Quality 0.2958 0.2958 0.1479

CRITERIA Price 0.0197 0.0331 0.1376

SCORE Delivery 0.0150 0.0054 0.0497 0.3305 0.3343 0.3352 1.0000

Supplier C - C.D. Industries Ltd. should be chosen for supply of Wire Mesh.

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MATERIAL: WOOL

THE PAIR-WISE COMPARISON MATRICES FOR EACH OF THE THREE CRITERIA ARE SUMMARIZED BELOW: Quality B C 1 3 1 3 1/3 1 PRICE B C 5 5 1 3 1/3 1

SUPPLIERS A B C SUPPLIERS A B C SUPPLIERS A B C

A 1 1 1/3 A 1 1/5 1/5

DELIVERY A B C 1 3 5 1/3 1 3 1/5 1/3 1

THE PRIORITIZED DECISION CRITERIA ACCORDING TO THE COMPARISONS IS SUMMARIZED BELOW CRITERIA Quality Price Delivery Quality 1 1/9 1/7 Price 9 1 1/5 Delivery 7 5 1

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DEVELOPING MATRICES AND PERFERENCE VECTORS FOR ALL THE PAIR-WISE COMPARISON MATRICES FOR CRITERIA Quality B C 0.4286 0.4286 0.4286 0.4286 0.1428 0.1428

Suppliers A B C

A 0.4286 0.4286 0.1428

Row Total 1.2858 1.2858 0.4284

Row Average 0.4286 0.4286 0.1428 1.0000

Price Suppliers A B C A 0.7142 0.1429 0.1429 B 0.7895 0.1579 0.0526 C 0.5556 0.3333 0.1111 Row Total 2.0593 0.6341 0.3066 Row Average 0.6874 0.2114 0.1022 1.0000

Suppliers A B C

A 0.6522 0.2174 0.1304

Delivery B C 0.6923 0.5556 0.2308 0.3333 0.0769 0.1111

Row Total 1.9001 0.7815 0.3184

Row Average 0.6334 0.2605 0.1061 1.0000

THE PERFERENCE VECTOR ARE SUMMARIZED IN THE FOLLOWING MATRIX CRITERION SUPPLIERS QUALITY PRICE A 0.4286 0.6874 B 0.4286 0.2114 C 0.1428 0.1022

DELIVERY 0.6334 0.2605 0.1061

RANKING THE CRITERIA CRITERIA Quality Price Delivery Quality 0.7975 0.0886 0.1139 Price 0.8824 0.0980 0.0196 Delivery 0.5385 0.3846 0.0769 Row Total 2.2184 0.5712 0.2104 Row Average 0.7395 0.1904 0.0701 1.0000

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THE PERFERENCE VECTOR FOR THE CRITERIA IS CRITERIA QUAILTY PRICE DELIVERY SCORE 0.7395 0.1904 0.0701

DEVELOPING AN OVERALL RANKING MATRIX MULTIPLICATION QUAILTY QUAILTY PRICE DELIVERY 0.7395 0.1904 0.0701 X A B C 0.4286 0.4286 0.1428 PRICE 0.6874 0.2114 0.1022 DELIVERY 0.6334 0.2605 0.1061

SUPPLIERS A B C Quality 0..3169 0.3169 0.1056

CRITERIA Price 0.1307 0.0403 0.0195

SCORE Delivery 0.0444 0.0183 0.0074 0.4920 0.3755 0.1325 1.0000

Supplier A - Flow Care Industries Ltd. should be chosen for supply of Wool.

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RESULTS

SL.NO. 1.

MATERIAL STUD&NUT

PRESENT SUPPLIER C.D Industries Ltd

SUGGESTED SUPPLIER R.D Forge Industries Ltd

2.

FLANGE

R.D Forge Industries Ltd

R.D Forge Industries Ltd

3.

SS PLATES

Flow Care Industries Ltd

R.D Forge Industries Ltd

4.

ANGLE & FLAT

C.D Industries Ltd

C.D Industries Ltd

5.

SEAMLESS ERW PIPES

C.D Industries Ltd

Flow Care Industries Ltd

6.

VALVES

C.D Industries Ltd

C.D Industries Ltd

7.

WIREMESH

C.D Industries Ltd

C.D Industries Ltd

8.

WOOL

Flow Care Industries Ltd

Flow Care Industries Ltd

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SUGGESTIONS

Supplier B-R.D Forge Industries Ltd. should be chosen for supply of STUD & NUT , instead of present Supplier C-C.D. Industries Ltd Supplier B-R.D Forge Industries Ltd. should be chosen for supply of SS PLATES , instead of present Supplier A- Flow Care Industries Ltd. Supplier A- Flow Care Industries Ltd. should be chosen for supply of Seamless ERW Pipes ,instead of present Supplier C-C.D. Industries Ltd .

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CONCLUSION

The analytical hierarchy process provides a useful means for identifying alternatives and criteria and analyzing the decision-making process. In order to rely on this result, the AIPL must have confidence in the judgements made in developing the pair wise comparisons. However, even if AIPL does not make its selection based on the AHP results, following this process can help identify and prioritize the criteria and identify the strengths & weakness of the different suppliers.

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REFERENCE

Russell and Taylor III operational management, Prentice Hall of India; 4th edition (2008). Panneerselvam R. and Senthilkumar R. project management, PHI Learning India; 3rd edition. www.acousticsind.com

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