Evaluating fit of supplier performance to decision maker's goals for on-time delivery and product quality: a fuzzy set-based approach

The purpose of this paper is to demonstrate how a fuzzy goal-setting approach can be effectively utilised for supplier selection multi-criteria decision making. Fuzzy logic is used to manage the process of supplier selection based upon performance aspects of on-time delivery (i.e., not early or late) and product quality defined by non-damaged parts or lack of design conformance. Managerial goals for these performance criteria are set that recognise the integrative nature of the production process and vendor performance. Then based on fuzzy probabilities of meeting or exceeding the company goals, a degree of fit to the goals is derived allowing a rank ordering of suppliers for specific situations. While only two parameters are used in the application of the model developed herein, the algorithm can be expanded to any number of criteria and experts without loss of generality. The results illustrate the dynamic nature of scenario setting in decision making. The model is recommended as ideally suitable for small to medium size companies since computations can be performed utilising standard spreadsheet software.