Supplier Prioritization to Manage Logistics Risk Factors using AHP Tool: An Empirical Case Analysis

Abstract

Risk management in logistics is arduous and involves a recondite number of issues such as
selecting suppliers, performance of the suppliers, third party, outsourcing and so on.
Selecting the best supplier by abating other suppliers has always been a challenge for the
production system as there many internal and external vulnerabilities with less analogy. This
study assesses the operational risk factors with its plethora of tortuous and downstream
partners and develops a model using Analytical Hierarchy Process (AHP) tool. Considering
the selection criteria for managing risks, this tool saturates and prioritizes the suppliers.
AHP engenders a practical Multi-Criteria Decision Making (MCDM) tool providing the
foundation of making a documented decision making. The purpose of this paper is serving a
prioritized list of alternative suppliers in a way that if one supplier is unable to sustain and
supply materials, the company gets the second option to choose another supplier within no
time. Thus, the production system will not be hampered, the risk factors will be minimized
and the company will be beneficent.