Solving multi-criteria supplier segmentation based on the modified FAHP for supply chain management: a case study

The multi-criteria supplier segmentation (MSS) has become one of the most important problems and plays a key role in every global company. It is vital for every company to successfully select suppliers, to undertake selection evaluation process for a long time, and to invest enormous of capital and effort to manage supply chain efficiently. This study aims to propose a new fuzzy analytic hierarchy process (FAHP) method for the efficiency evaluation of suppliers with bell-shaped membership functions. Since the MSS is a multi-criteria decision-making problem, we decomposed the problem into two main clusters grouping criteria, including the criterion of capability and the criterion of willingness in the first phase. Then the modified FAHP method is applied to acquire a ranking of the candidate suppliers in the second phase with evaluation of different alternatives. A study from the case company was conducted to choose the best solution alternative(s) for the case company. From the experiments, we show that the proposed method is a very practical and efficient technique for the decision makers to select best options for the MSS in managing supply chain.