A multi-level decision making model for the supplier selection problem in a fuzzy situation

Supplier selection plays a vital role in evolving an effective supply chain and the overall performance of organisations. Choosing suppliers may involve different levels arranged in a hierarchical structure. Decisions are made successively starting from the first level to the last level. Decision variables are partitioned between different levels and are called controlling factors. In the paper, we propose a multilevel supplier selection problem with uncertain or fuzzy demand and supply. Since objectives may be conflicting in nature, possible relaxations in the form of tolerances are provided by the upper level decision makers to avoid decision deadlocks. We use (linear) membership functions to fuzzily describe objective functions, as well as the controlling factors, and generate satisfactory solutions. We extend and present an approach to solving multilevel decision making problems when fuzzy constraints are employed. Different scenarios are constructed within a numerical illustration, based on the selection of controlling factors by the upper level decision makers.