Applying Multiple Criteria Decision-Making Models for Co-Packer Selection Problems: A Case Study of FMCG Company

Abstract

The purpose of this research was to develop the co-packer selection model. The proposed model consists of appropriate criteria for the co-packer selection problem, and the suitable selection method for finding the best co-packer for case of FMCG company where currently has 4 parties as candidates on co-packing business activities. The research was formulated the problem as multiple criteria decision-making problem (MCDM) and was applying 3 techniques: Analytic Hierarchy Process (AHP), Fuzzy Analytical Hierarchy Process (FAHP) by Arithmetic Mean and Geometric Mean as tools for comparing a weight of criteria and the ranking of alternatives as well as a result consistency. The findings indicated that after applying AHP and FAHP methods to evaluate the weight of each criteria, it reveals that the most important criteria are Quality (43.31%, 43.33%, 43.11%), next is Delivery (26.57%, 26.55%, 27.17%), Cost (19.09%, 19.27%, 19.34%), Reliability (7.61%, 7.65%, 7.00%) and Services (3.41%, 3.43%, 3.18%) respectively. In term of selecting of alternative, it also shows that there is a consistency from 3 techniques. The result reveals that supplier A is the best co-packer of the case study company, which 1st evaluator was rate to 39% and 2nd evaluator was rate to 40%. Furthermore, the research indicates that the case study company has a potential policy to reduce cost in logistics about 2,785,357.05 THB in year 2020 and able to improve the efficiency on working process from end-to-end process.