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VENDOR SELECTION IN SUPPLY CHAIN USING RELATIVE RELIABILITY RISK EVALUATION

Vendor is an important constituent in the supply chain and supply chain management is truly vendor management. Performance evaluation based vendor selection is a decision of strategic importance to an industry. This paper introduces the concept of relative reliability risk assessment especially for new vendors, where information availability is inadequate to calculate reliability. The paper deals with multiple attributes of vendor to which Analytical Hierarchy Process is applied using verbal assessments for relative measurements. The technique used for assigning weights is the entropy method. Final value of Relative Reliability Risk Index (R 3 I) is calculated. The concept of Alternatives Functionality Graph is introduced. A real life case study considering Multiple Attribute Decision Making (MADM) with proposed method is illustrated.