SCM 371 Lecture 17: How to Buy-Module 3.3-Techniques in Supplier Selection and Evaluation

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The analytic hierarchy process (ahp) for supplier selection: developed by thomas saaty in the 1980s, uses pair wise comparisons, advantages. To select the best car for my needs. Step 3: determine the relative importance of attributes: Calculate the principal vector (pv) or priority weight (pw) To calculate the principal vector (pv) or priority weight (pw) simply take the average of each row. This indicates the importance of each criteria or attribute. Step 4: evaluate the performance of each alternative. If (cid:449)e do(cid:374)"t ha(cid:448)e hard data for the alter(cid:374)ati(cid:448)es, the(cid:374) (cid:449)e (cid:374)eed to do a pair (cid:449)ise comparison. Step 5: evaluate the weighted scores for each alternative. Step 3: determine the relative importance of attributes- Multiply the unnormalized matrix with the pv (use mmult function in. Divide this result by the pv (which results in a new vector) Take the average of the ele(cid:373)e(cid:374)ts i(cid:374) this (cid:448)e(cid:272)tor, (cid:449)hi(cid:272)h represe(cid:374)ts (cid:455)our max (lamda_max) Calculate the consistency index (ci) with the following formula:

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