Selection and Evaluation of Suppliers Using Analysis Hierarchy Process: A Case Study of a Retail Company in Chiang Mai

Abstract

This study aims to evaluate the supplier performance of goods delivery to a retail company in Chiang Mai by the Analysis Hierarchy Process. The evaluation factors are defined. This is to inform the company and its suppliers about the best performance under defined factors as well as the factors affecting the delivery the most. The evaluation factors are developed from theories and previous studies. A questionnaire regarding those factors is designed and then sent to the assessors: the company case study, specialists and its suppliers for evaluation. Significant evaluation factors based on the assessors' perspectives and the best performance of suppliers are shown. The study suggests that the Analysis Hierarchy Process is an appropriate evaluation method. Such a method is a hierarchical approach mitigating bias in decision making. The result is in line with the Consistency Ratio for the reliability of the evaluation. The evaluation results demonstrate the six primary factors and 12 secondary factors. The factors affecting the supplier delivery performance the most are cost in the primary factor and discount in the secondary factor, respectively. According to the supplier evaluation, a company case study finds supplier E has the best performance, whereas specialists suggest supplier B is the best. In terms of supplier self-assessment, supplier I reveals the best performance. When weighted average by the importance of the assessors, the outcome suggests that suppliers B and E have the best performance. Accordingly, these results can be applied as a guideline to improve and develop supplier delivery performance in the future.