Vendor Selection

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Supplier evaluation and selection viaTaguchi loss functions and an AHP : 

Supplier evaluation and selection viaTaguchi loss functions and an AHP By: Parabesh De Roll No: 47 PGDIE - 35

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12/6/2008 2

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Mathematical Model : 

12/6/2008 5 Mathematical Model I. Loss via Taguchi loss functions L (y)= k (y − m)2 L (y)= k1(y − m)2 or L (y)= k2 (y − m)2 Fig. Two-sided equal-specification Taguchi Fig. Two-sided Taguchi loss function loss function with specification preference

Mathematical Model : 

12/6/2008 6 Mathematical Model II. Weighting via an AHP Suppose that there are n criteria which need to be weighted for decision-making; then there are n(n −1)/2 judgments are needed. The comparison matrix for these n criteria can be expressed as where, Wi =weight of ith criterion , Wj =weight of jth criterion and III. Ranking the suppliers the total loss of all the criteria to each supplier can be calculated by the following equation: n Lossj = Σ WiCij i=1 [ a11 a12 · · · a1n ] [ a21 a22 · · · a2n ] A = [ · · · ] [ · · · ] [ a31 a32 · · · a3n ] aij = Wi and aij = 1 Wj aji

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