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Supplement S7
Supplier Selection
To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved.
Analytical Hierarchy
Process
 Ranks decision alternatives and selects
the best one
 Allows consideration of multiple criteria
1. Establish preferences for each alternative
for each criteria
2. Assign importance scores to each criteria
3. Preferences and importance scores are
combined for final selection
To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved.
Supplier Selection Example
Suppliers: A, B, and C
Criteria: product cost, product quality, service,
and delivery
PREFERENCE LEVEL
Equally preferred
Equally to moderately preferred
Moderately preferred
Moderately to strongly preferred
Strongly preferred
Strongly to very strongly preferred
Very strongly preferred
Very strongly to extremely preferred
Extremely preferred
NUMERICAL
VALUE
1
2
3
4
5
6
7
8
9
Table S7.1
To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved.
Southcorp Company
Pairwise comparison
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
B
C
1 1/3 1
3 1 7
1 1/7 1
DELIVERY
A B C
A
B
C
1 1/3 1/2
3 1 4
2 1/4 1
Example S7.1
To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved.
Southcorp Company
Pairwise comparison
COST
A B C
A 1 3 2
B 1/3 1 1/5
C 1/2 5 1
QUALITY
A B C
SERVICE
A B C
A 1 6 1/3
B 1/6 1 1/9
C 3 9 1
A
B
C
1 1/3 1
3 1 7
1 1/7 1
DELIVERY
A B C
A
B
C
1 1/3 1/2
3 1 4
2 1/4 1
COST
SUPPLIER
A
B
C
A
B
C
1
1/3
1/2
3
1
5
2
1/5
1
11/6
9
16/5
Example S7.1
To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved.
Southcorp Company
Pairwise comparison
COST
A B C
A 1 3 2
B 1/3 1 1/5
C 1/2 5 1
QUALITY
A B C
SERVICE
A B C
A 1 6 1/3
B 1/6 1 1/9
C 3 9 1
A
B
C
1 1/3 1
3 1 7
1 1/7 1
DELIVERY
A B C
A
B
C
1 1/3 1/2
3 1 4
2 1/4 1
COST
SUPPLIER
A
B
C
A
B
C
6/11
2/11
3/11
3/9
1/9
5/9
5/8
1/16
5/16
Example S7.1
To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved.
Southcorp Company
Pairwise comparison
COST
A B C
A 1 3 2
B 1/3 1 1/5
C 1/2 5 1
QUALITY
A B C
SERVICE
A B C
A 1 6 1/3
B 1/6 1 1/9
C 3 9 1
A
B
C
1 1/3 1
3 1 7
1 1/7 1
COST
SUPPLIER
A
B
C
DELIVERY
A B C
A
B
C
1 1/3 1/2
3 1 4
2 1/4 1
Row
A
B
C
Average
0.5455
0.1818
0.2727
0.3333
0.1111
0.5556
0.6250
0.0625
0.3125
0.5012
0.1185
0.3803
1.0000
Example S7.1
To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved.
Southcorp Company
Summarized preferences
CRITERIA
SUPPLIER
Cost
Quality
Service
Delivery
A
B
C
0.5012
0.1185
0.3803
0.2819
0.0598
0.6583
0.1790
0.6850
0.1360
0.1561
0.6196
0.2243
Pairwise ranking of importance
CRITERIA
Cost
Quality
Service
Delivery
COST
QUALITY
SERVICE
DELIVERY
1
5
1/3
1/4
1/5
1
1/9
1/7
3
9
1
1/2
4
7
2
1
Example S7.1
To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved.
Southcorp Company
Summarized preferences
CRITERIA
COST
QUALITY
SERVICE
DELIVERY
ROW
AVERAGES
Cost
Quality
Service
Delivery
0.1519
0.7595
0.0506
0.0380
0.1375
0.6878
0.0764
0.0983
0.2222
0.6667
0.0741
0.0370
0.2857
0.5000
0.1429
0.0714
0.1993
0.6535
0.0860
0.0612
1.0000
Preference vector
CRITERIA
Cost
Quality
Service
Delivery
0.1993
0.6535
0.0860
0.0612
Example S7.1
To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved.
Southcorp Company
Overall score
CRITERIA
A
B
C
Cost
Quality
Service
Delivery
0.5012
0.1185
0.3803
0.2819
0.0598
0.6583
0.1790
0.6850
0.1360
0.1561
0.6196
0.2243
CRITERIA
Cost
Quality
Service
Delivery
0.1993
0.6535
0.0860
0.0612
Supplier A score = 0.1993(0.5012) + 0.6535(0.1819) +
0.0860(0.1790) + 0.0612(0.1561)
= 0.3091
Supplier B score = 0.1595
Select Supplier C
Supplier C score = 0.5314
Example S7.1
To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved.
AHP with Excel
Exhibit S7.1
To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved.
AHP with Excel
Exhibit S7.2
To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved.
AHP with Excel
Exhibit S7.3
To Accompany Russell and Taylor, Operations Management, 4th Edition,  2003 Prentice-Hall, Inc. All rights reserved.

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