SUPPLIER SELECTION BY USING THE COMBINATION METHOD OF ANALYTICAL HIERARCHY PROCESS (AHP) AND TECHNIQUE FOR ORDER PREFERENCE BY SIMILARITY TO IDEAL SOLUTION (TOPSIS)

Abstract

Supplier selection is one essential job in the company. Selecting the right supplier significantly decreases material cost and increases company’s competitiveness. The excessive amount of defective products and the decreasing order of customer are the issue for starting the observation in PT XYZ. After analyzed, the problem is significantly caused by the supplier. For selecting the supplier, PT XYZ has no any special requirement. There are six suppliers that available to provide the material of copper scrap for company. Among them, supplier 1 is currently used by the company. The indicator of supplier performance is developed with following QCDFR method as the criteria that results sub-criteria as well. The priority weight of each of them is calculated by using the combination method of Analytical Hierarchy Process (AHP) which results quality – 0.445, cost – 0.291, delivery – 0.136, flexibility – 0.061, and responsiveness – 0.067 and Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) method which concludes that the best performance is shown by supplier 2.