Measuring long-term performance of a manufacturing firm using the Analytic Network Process (ANP) approach

This paper provides a multicriteria performance measurement model to measure a manufacturing firm's performance in terms of areas of success, which can be defined as critical areas in generating revenues and controlling costs in the operations of a manufacturing firm. In developing the performance measurement model, the Analytic Network Process (ANP) approach is used. The ANP approach, which is the general form of the Analytic Hierarchy Process (AHP) methodology, is recommended when independence among different elements of a system assumption is violated. In a manufacturing system, the system's attributes are interrelated. Furthermore, the relative importance of these attributes with respect to each other and their contribution to the overall performance are affected by the competitive strategies applied by the manufacturing firms. The performance evaluation model developed here incorporates the competitive strategies and interdependence between the system attributes in its hierarchical structure and achieves a more realistic and accurate representation of the firm's long-term performance.