Supplier risk assessment based on trapezoidal intuitionistic fuzzy numbers and ELECTRE TRI-C: a case illustration involving service suppliers

Kannan Govindan and Martin Brandt Jepsen
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Kannan Govindan: Department of Business and Economics, University of Southern Denmark, Odense M-5230, Denmark
Martin Brandt Jepsen: Department of Business and Economics, University of Southern Denmark, Odense M-5230, Denmark

Journal of the Operational Research Society, 2016, vol. 67, issue 2, 339-376

Abstract: Many companies today have embraced the concept of risk management, usually in the form of enterprise risk management or supply chain risk management. Both are based on a holistic view of risks. Hence, risks related to specific functions within a company must be considered more broadly than previously. Risks, however, involve uncertainty, and the less specific the context in which risks are viewed, the more uncertainty will be involved. One particular way to express uncertainty is through trapezoidal intuitionistic fuzzy numbers (TrIFNs). In this paper, risks that are relevant for supplier risk assessments are first collected from the literature. Then it is illustrated how the multi-criteria decision analysis method ELECTRE TRI-C can be used for sorting suppliers into risk categories, when the risks as well as some of the method’s parameters are expressed with TrIFNs. In order to do this, we make use of a small modification of an existing method for converting TrIFNs into crisp values. The approach is illustrated in a case problem based on a company that is looking for service providers (suppliers) of electrical maintenance. The problem involves 20 suppliers that are sorted into three risk categories based on evaluations from 27 criteria. Results from the case study point to two low risk suppliers. A further ad-hoc analysis suggests one of these to be less risky than the other.

Date: 2016
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