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Response to demand uncertainty of supply chains: A value-focused approach with AHP and TOPSIS
Journal article   Peer reviewed

Response to demand uncertainty of supply chains: A value-focused approach with AHP and TOPSIS

Sonia M. Lo, James C. Chen and Tong-Sheng Liu
International Journal of Industrial Engineering : Theory Applications and Practice, Vol.25, pp.739-756
2018

Abstract

AHP Risk management Supply chain management TOPSIS Industrial and Manufacturing Engineering
This paper aims to develop a management framework that can assist managers to identify the risks in their supply chain and assess potential solutions for these risks. Two multi-attributed decision analysis tools, namely, analytic hierarchy process (AHP) and technique for an order of preference by similarity to ideal solution (TOPSIS) are utilized. The framework proposed is implemented in one electronics company in Taiwan, with three plants in mainland China. With this framework, the case company identifies four sorts of risks in their supply chain, e.g., production, labor, material, and fulfillment, and further determines which plant is most appropriate for order allocation. Further, this framework assists the company to reveal the weakest functions of each factory. As such it facilitates the company in making decisions of the resource allocation among the three plants. It thus contributes to supply chain managers in evaluating the risk factors of each manufacturing site and developing an appropriate strategy.

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