The Southcorp Company is selecting among suppliers A, B and C and will use AHP t

Question

The Southcorp Company is selecting among suppliers A, B and C and will use AHP to make its selection. The criteria on which Southcorp will base its choice are cost, quality, service and delivery. Southcorp’s relative valuations of those attributes are shown in the following comparison matrix:

Criteria

COST

QUALITY

SERVICE

DELIVERY

Cost

1

1/5

3

4

Quality

5

1

9

7

Service

1/3

1/9

1

2

Delivery

1/4

1/7

1/2

1

The following tables summarize how the three suppliers score with respect to each criterion.

Cost

A

B

C

A

1

3

2

B

1/3

1

1/5

C

1/2

5

1

Quality

A

B

C

A

1

6

1/3

B

1/6

1

1/9

C

3

9

1

Service

A

B

C

A

1

1/3

1

B

3

1

7

C

1

1/7

1

Delivery

A

B

C

A

1

1/3

1/2

B

3

1

4

C

2

1/4

1

Perform the AHP analysis and determine which supplier should be selected.

Evaluate the consistency of Southcorp’s 4x4 comparison matrix.

Criteria

COST

QUALITY

SERVICE

DELIVERY

Cost

1

1/5

3

4

Quality

5

1

9

7

Service

1/3

1/9

1

2

Delivery

1/4

1/7

1/2

1

Explanation / Answer

Matrix Multiplication
2nd Iteration

Consistency Ratio = 5.6%

Matrix Multiplication
1st Iteration

Matrix Multiplication
2nd Iteration

Matrix Multiplication
1st Iteration

Matrix Multiplication
2nd Iteration

Matrix Multiplication
1st Iteration

Matrix Multiplication
2nd Iteration

Matrix Multiplication
1st Iteration

Matrix Multiplication
2nd Iteration

Supplier B Should be the most preferred Supplier.

Criteria COST QUALITY SERVICE DELIVERY Cost 1.00 0.20 3.00 4.00 Quality 5.00 1.00 9.00 7.00 Service 0.33 0.11 1.00 2.00 Delivery 0.25 0.14 0.50 1.00

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