Supplier selection problem: a comparison of the total cost of ownership and analytic hierarchy process approaches
- 1 August 2002
- journal article
- review article
- Published by Emerald Publishing in Supply Chain Management: An International Journal
- Vol. 7 (3), 126-135
- https://doi.org/10.1108/13598540210436586
Abstract
Supplier selection and evaluation are arguably one of the most critical functions for the success of an organization. Several approaches exist in the literature to objectively evaluate suppliers, including analytic hierarchy process and total cost of ownership. Analytic hierarchy process provides a framework to cope with multiple criteria situations involving supplier selection, while the total cost of ownership is a methodology and philosophy, which look beyond just the price of a purchase to better understand and manage costs in selecting and maintaining relationships with suppliers. This paper illustrates the two approaches and provides a comparison.Keywords
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