Case study 3: Supplier Ranking In this real case study, you will be working on a supplier ranking problem. It is an actual application for a manufacturing company located in Tijuana, Mexico. Because of confidentiality issues, the data given here have been disguised. The supplier selection criteria and sub-criteria have been defined by the Purchasing Manager as shown in Figure 6.8. Note that flexibility, process capability (Cpk Index), and service have to be maximized, while the other criteria have to be minimized. The company is considering 21 potential suppliers and the supplier data with respect to the criteria are given in Table 6.42.
Questions
(a) Scale the supplier criteria values using linear normalization (Simple linearization).
(b) Using the scaled values from part (a), apply the L2 metric method to rank the suppliers.
(c) Determine the criteria/sub-criteria weights using the following methods (use your own judgments).
(i) Rating method
(ii) Pair-wise comparison of criteria/sub-criteria and Borda count
(iii) AHP. Test the consistency of all pair-wise comparison matrices
(d) Using the weights obtained in part (c) and the scaled supplier data in part (a), determine the supplier rankings by all three methods.
(e) Compare the supplier rankings obtained by L2 metric, rating method, Borda count, and AHP. Discuss any rank reversals.