IJSTE - International Journal of Science Technology & Engineering | Volume 2 | Issue 6 | December 2015 ISSN (online): 2349-784X
A Vendor Selection Model For A Reverse Supply Chain Management Tinu Thomas PG Scholar Department of Industrial Engineering & Management Mangalam college of Engineeering Ettumanoor
Vipin Mathew Assistant Professor Department of Mechanical Engineering Mangalam college of Engineeering Ettumanoor
Abstract The aim of this paper is to determine the appropriate supplier providing the most customer satisfaction for the criteria identified in the Reverse supply chain Management. The choice of suppliers and their performance assessment are becoming major challenges that face supply chain managers or directors especially in Reverse Supply Chain Management. Evaluating suppliers and selecting one of them are complicated tasks due to the fact that various criteria or objectives must be considered in the decision making process. Also in many real world cases the criteria are not equally important for the purchase managers. In this study, we proposed a supplier selection analysis model considering both Shannon Entropy and Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) method. Subjective and objective opinions of purchase managers/experts is turned into quantitative form using Shannon Entropy. TOPSIS technique is used for calculating the supplier’s ratings. Keywords: Supplier Selection, , Shannon Entropy, Reverse Supply Chain Management, TOPSIS Method. ________________________________________________________________________________________________________
I. INTRODUCTION Vendor Selection deals with choosing the right vendor or supplier who will be able to provide the right product at right time at right price. The purchase manager is ought to consider variety of criteria like cost, quality, technology reuse of resources, pollution caused etc. Choosing the right vendor based on these criteria is a cumbersome task as profit is a main concern that gets affected by the selection. In Reverse Supply Chain management, evaluating suppliers and selecting best among them are complicated tasks due to the fact that various criteria’s such as Technology, Reuse of resource, Pollutant emission must be considered in the decision making process.
II. NEED FOR USING SHANNON ENTROPY AND TOPSIS Shannon Entropy: There are several factors to be dealt with while making decision on the vendor. Considering the literature we find 1) Among the criteria worth considerable some are quantitative while some are qualitative. 2) Several people are involved in the decision making 3) Criteria are uncertain in practice 4) Decision models can be either compensatory or non-compensatory methods It is challenging to find the best way to evaluate and select supplier. Shannon entropy provides us a way to overcome these challenges TOPSIS: The critical issue is to find a suitable method to identify the best vendor. Technique for Order Performance by Similarity to Ideal Solution (TOPSIS), provides the basis for developing supplier selection models. It is based upon the concept that the chosen alternative must have the shortest distance from the Positive Ideal Solution (PIS) and the farthest from the Negative Ideal Solution (NIS). Here in this paper the appropriate supplier providing the most customer satisfaction for the criteria identified in the Reverse supply chain Management is determined.
III. PROBLEM IDENTIFICATION AND PROBLEM STATEMENT The work was studied in a small scale rubber industry. Company faces some problems due to frequent raw material rejection due to some impurities in recycled rubber powder (recycled raw material). Production rate is lowered during these times due to rejection. Due to this the profit earned is being fluctuated per year. The high cost of production due to high cost and inconsistency in cost of raw materials. In addition to that, improper supplier rating and review system is existing within the company. Raw material is accepted only based on the availability and cost at the time of ordering. Supplier performance review is not done within periods, mean while most of the raw material is being rejected at monthly. Unavailability of requested raw
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