Raw Material Supplier Selection with Analytics Hierarchy Process (AHP) Method

Abstract

The purpose of this research is to select suppliers of raw materials that will be used for production activities within the company. In this paper the method used was Analytic Hierarchy Process (AHP). This method is a method for solving a complex and unstructured situation into several components in a hierarchical arrangement, by giving a subjective value about the relative importance of each variable, and determining which variable has the highest priority to influence the outcome of the situation. The results are obtained from decomposition result or problem structure division in each hierarchy, then determining relative importance scale from each element based on pairwise comparison of each element in hierarchy, further calculating priority synthesis by doing multiplication process between local priority with criteria on hierarchy. Certainly, decision support result which obtain is very helpful for company to choose supplier, so that production process is running smoothly and customer demand can completed on time.