Supplier Selection Using The Analytical Hierarchy Process Method

Adi Saptari, Supratman, Neva Permatasari Sutedjo
Faculty of Business, President University

Effendi Mohamad
Fakulti Kejuruteraan Pembuatan Universiti Teknikal Malaysia Melaka


This research was conducted at one of the companies that produces special purpose machinery. The company had problems in the procurement department which supplies raw materials and electrical parts. From the data on the delivery of purchased electrical parts in 2018, there a delay in delivery occurred between a week to 10 working days or eight per cent of the total 125 purchased orders issued, resulting in the disruption of the assembly process and delays in delivery to customers. The company has three suppliers of electrical parts, namely PT.NE, PT.SA and PT.MSI. Due to the importance of the problem, the company needs to evaluate and determine which supplier has the highest performance in terms of quality, price, delivery, flexibility and services; so that the company can prioritize the supplier in fulfilling the required purchase order for electrical parts. This study aimed to select the best supplier using the Analytical Hierarchy Process (AHP) method. This method is required to determine the criteria, sub-criteria and the weight of each criterion. The results showed that there were five criteria and ten subcriteria considered in determining the suppliers. From the analysis using this method, the value obtained for the supplier of PT.NE was 0.451, PT.SA was 0.192 and PT.MSI was 0.357. It was concluded that the best performance supplier is PT.NE. This study has presented the importance of consensus in the teamwork that determines the result of the study.

Keywords: AHP, Criteria and sub-criteria, Decision making, Supplier