Supplier Selection by AHP in KMC Pharmaceutical: Use of GMIBM Method for Inconsistency Adjustment

Abstract

The supplier selection problem is one of the most important constituent for managers. There are some influential criteria in the selection of supplier and in this paper selection of supplier includes quality, cost, service, risk management and supplier profile. However, it is frequently impossible to find a best supplier in all areas. In addition, lack of proper selection and evaluation of excels supplier can affect long term survival of firms. The contribution of this paper is in threefold. First, a geometric mean induced bias matrix (GMIBM), is used to quickly identify the most inconsistent data in the judgment matrix. This helps to preserves most of the original information in matrix, but also faster than existing models. Secondly, it solves the supplier selection process problem in a Kathmandu Medical College (KMC) pharmaceutical firm using analytic hierarchy process (AHP) model. AHP is a decision making method and considered a reliable model for supplier evaluation problem in KMC. At last, Development of Supplier Selection Process (SSP) shows the whole steps followed for supplier selection.