1. To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved. Supplement S7 Supplier Selection

2. To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved. Analytical Hierarchy Process 1.Establish preferences for each alternative for each criteria 2.Assign importance scores to each criteria 3.Preferences and importance scores are combined for final selection Ranks decision alternatives and selects the best one Ranks decision alternatives and selects the best one Allows consideration of multiple criteria Allows consideration of multiple criteria

3. To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved. Supplier Selection Example Suppliers:A, B, and C Criteria:product cost, product quality, service, and delivery NUMERICAL PREFERENCE LEVELVALUE Equally preferred1 Equally to moderately preferred2 Moderately preferred3 Moderately to strongly preferred4 Strongly preferred5 Strongly to very strongly preferred6 Very strongly preferred7 Very strongly to extremely preferred8 Extremely preferred9 Table S7.1

4. To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved. Southcorp Company COSTQUALITYSERVICEDELIVERY ABC A132 B1/311/5 C1/251 ABC A161/3 B1/611/9 C391 ABC A11/31 B317 C11/71 ABC A11/31/2 B314 C21/41 Pairwise comparison Example S7.1

5. To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved. Southcorp Company COSTQUALITYSERVICEDELIVERY ABC A132 B1/311/5 C1/251 ABC A161/3 B1/611/9 C391 ABC A11/31 B317 C11/71 ABC A11/31/2 B314 C21/41 Pairwise comparison COST SUPPLIERABC A132 B1/311/5 C1/251 11/6916/5 Example S7.1

6. To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved. Southcorp Company COSTQUALITYSERVICEDELIVERY ABC A132 B1/311/5 C1/251 ABC A161/3 B1/611/9 C391 ABC A11/31 B317 C11/71 ABC A11/31/2 B314 C21/41 Pairwise comparison COST SUPPLIERABC A6/113/95/8 B2/111/91/16 C3/115/95/16 Example S7.1

7. To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved. Southcorp Company COSTQUALITYSERVICEDELIVERY ABC A132 B1/311/5 C1/251 ABC A161/3 B1/611/9 C391 ABC A11/31 B317 C11/71 ABC A11/31/2 B314 C21/41 Pairwise comparison COST Row COST Row SUPPLIERABCAverage A0.54550.33330.62500.5012 B0.18180.11110.06250.1185 C0.27270.55560.31250.3803 1.0000 Example S7.1

8. To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved. Southcorp Company Summarized preferences CRITERIA SUPPLIERCostQualityServiceDelivery A0.50120.28190.17900.1561 B0.11850.05980.68500.6196 C0.38030.65830.13600.2243 Pairwise ranking of importance CRITERIACOSTQUALITYSERVICEDELIVERY Cost11/534 Quality5197 Service1/31/912 Delivery1/41/71/21 Example S7.1

9. To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved. Southcorp Company Summarized preferences ROW CRITERIACOSTQUALITYSERVICEDELIVERYAVERAGES Cost0.15190.13750.22220.28570.1993 Quality0.75950.68780.66670.50000.6535 Service0.05060.07640.07410.14290.0860 Delivery0.03800.09830.03700.07140.0612 1.0000 CRITERIA Cost0.1993 Quality0.6535 Service0.0860 Delivery0.0612 Preference vector Example S7.1

10. To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved. Southcorp Company Overall score CRITERIA Cost0.1993 Quality0.6535 Service0.0860 Delivery0.0612 CRITERIA CostQualityServiceDelivery A0.50120.28190.17900.1561 B0.11850.05980.68500.6196 C0.38030.65830.13600.2243 Supplier A score=0.1993(0.5012) + 0.6535(0.1819) + 0.0860(0.1790) + 0.0612(0.1561) =0.3091 Supplier B score=0.1595 Supplier C score=0.5314 Select Supplier C Example S7.1

11. To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved. AHP with Excel Exhibit S7.1

12. To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved. AHP with Excel Exhibit S7.2

13. To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved. AHP with Excel Exhibit S7.3