Innovative and practical issues of multi-criteria decision-making in the supply chain
management
Prof. Valerio SalomonSao Paulo State University, Brasil
www.feg.unesp.br/~salomon
Workshop AHP/ANPITA 2011
www.feg.unesp.br/~salomon 2
Innovative and practical issues of multi-criteria decision-making in the
supply chain management
11/10/2011
Outline of presentation
1. Conceptual background2. Validation of an MCDM method application3. Compatibility Indexes4. Supply chain management
Workshop AHP/ANPITA 2011
www.feg.unesp.br/~salomon 3
Conceptual background
11/10/2011
Who won the Winter 2010 Olympics? A quest into priorities and rankings J. Multi-Crit. Decis. Anal. (Saaty, 2010)
Negotiating the Israeli–Palestinian controversy from a new perspectiveInt. J. Inf. Tech. Decis. (Saaty & Zoffer, 2011)
An innovative orders-of-magnitude approach to AHP-based mutli-criteria decision making: Prioritizing divergent intangible humane actsEur. J. Oper. Res. (Saaty & Shang, 2011)
Workshop AHP/ANPITA 2011
www.feg.unesp.br/~salomon 4
Conceptual background
11/10/2011
Who won the Winter 2010 Olympics?
Workshop AHP/ANPITA 2011
IOC Gold Silver Bronze Total
Canada 14 7 5 26
Germany 10 13 7 30
United States 9 15 13 37
Norway 9 8 6 23
CNN Total Gold Silver Bronze
United States 37 9 15 13
Germany 30 10 13 7
Canada 26 14 7 5
Norway 23 9 8 6
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Conceptual background
11/10/2011
Who won the Winter 2010 Olympics?
Workshop AHP/ANPITA 2011
Medal Gold Silver Bronze Priority
Gold 1 2 2 50%
Silver 1 1 25%
Bronze 1 25%
1st row PrioritiesCAN
(14, 7, 5)USA
(10, 13, 7)
1, 2, 2 50%, 25%, 25% 10 11.5
1, 3, 3 60%, 20%, 20% 10.8 11.0
1, 3, 4 63%, 21%, 16% 11.12 10.90
1, 3, 9 68%, 23%, 9% 11.69 10.69
1, 9, 9 82%, 9%, 9% 12.54 9.91
CAN 28x8 USA. p-value = 0.000156282 < 0.0004
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Conceptual background
11/10/2011
Who won the Winter 2010 Olympics?
Workshop AHP/ANPITA 2011
Sport Average ticket price CAN USA1 Alpine Skiing (Women’s Downhill) CND 125 = .223 0 /0 .185 / .23
21 Bobsleigh (Women’s) CND 60 = .107 .089 / .098 .018 / .010
39 Figure Skating (Ice Dance – Mixed) CND 290 = .518 .259 / .352 .171 / .119
48 Ice Hockey (Men’s) CND 560 = 1 .500 / .680 .330 / .230
49 Ice Hockey (Women’s) CND 220 = .393 .196 / .267 .130 / .090
86 Speed Skating (Men’s Team Pursuit) CND 140 = .250 .125 / .170 .083 / .058
2.524 / 3.035 2.757 / 2.444
48% / 55% 52% / 45%
Priorities used to rank: ( 50%, 33%, 17% ) / (68%, 23%, 9%)
[email protected] / AHP
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Conceptual background
11/10/2011
The Summer 2016 Olympics hosted city decisionA Ranking Reversal case
Workshop AHP/ANPITA 2011
City Round 3 Round 2 Round 1
Rio de Janeiro 66 (67%) 46 (48%) 26 (28%)
Madrid 32 (33%) 29 (31%) 28 (30%)
Tokyo - 20 (21%) 22 (23%)
Chicago - - 18 (19%)
98 95 94
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Conceptual background
11/10/2011
Negotiating the Israeli–Palestinian controversy
Workshop AHP/ANPITA 2011
www.feg.unesp.br/~salomon 9
Conceptual background
11/10/2011
Negotiating the Israeli–Palestinian controversy
Workshop AHP/ANPITA 2011
www.feg.unesp.br/~salomon 10
Conceptual background
11/10/2011
Negotiating the Israeli–Palestinian controversy
Workshop AHP/ANPITA 2011
Criteria CJHP RC IS PB CRW HR SPT Priorities
Control Jerusalem & holy places 1 .19 9 0 .21 1.81 8 25%
Refugee compensation…. 5.38 1 .22 0 7.74 5.73 1.68 25%
Increasing security .11 4.47 1 0 .33 8 7 19%
Permanent boarders 0 0 0 1 0 0 0 0%
Controlling & rationing of water 4.72 .13 3 0 1 5 .14 16%
Human rights .55 .17 .13 0 .20 1 .14 2%
Settlements in Palestinian territory .13 .60 .14 0 7 7 1 13%
Comparisons of the criteria for Israeli’s benefits from Palestinian concessions
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Conceptual background
11/10/2011
Negotiating the Israeli–Palestinian controversy
Workshop AHP/ANPITA 2011
Ratings scale for concession evaluation
Excellent 1.0
Very high 0.9
High 0.8
Medium 0.7
Low 0.5
Very low 0.4
Negligible 0.3
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Conceptual background
11/10/2011
Negotiating the Israeli–Palestinian controversy
Workshop AHP/ANPITA 2011
Israeli’s benefits from Palestinians’ concessions
Concession CJHP(25%)
RC(25%)
IS(19%)
PB(0%)
CRW(16%)
HR(2%)
SPT(13%) Total Ideal
Accept two-state solution VL E E N M .680 .736
Acceptance of noncontiguousState
N E E N N .605 .655
Acknowledge Israel’s existenceas a Jewish state
E E E VH M .924 1
Agree to compromise todemand of right of no return
H E E N VH .917 .992
… … … … … … … … … …
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Conceptual background
11/10/2011
Negotiating the Israeli–Palestinian controversy
Workshop AHP/ANPITA 2011
Retributive function
𝐴′ 𝑠𝑟𝑎𝑡𝑖𝑜=𝐺𝑎𝑖𝑛𝑡𝑜 𝐴 𝑓𝑟𝑜𝑚𝐵′ 𝑠𝑐𝑜𝑛𝑐𝑒𝑠𝑠𝑖𝑜𝑛
𝐴′ 𝑠 𝑝𝑒𝑟𝑐𝑒𝑝𝑡𝑖𝑜𝑛𝑜𝑓 𝐵′ 𝑠𝑔𝑎𝑖𝑛 𝑓𝑟𝑜𝑚 𝐴′ 𝑠𝑐𝑜𝑛𝑐𝑒𝑠𝑠𝑖𝑜𝑛
𝐴′ 𝑠𝑟𝑎𝑡𝑖𝑜= ∑ (𝐴′ 𝑠𝑏𝑒𝑛𝑒𝑓𝑖𝑡𝑠×𝐵′ 𝑠𝑐𝑜𝑠𝑡𝑠) 𝑓𝑟𝑜𝑚𝐵′ 𝑠𝑐𝑜𝑛𝑐𝑒𝑠𝑠𝑖𝑜𝑛∑ (𝐵′ 𝑠𝑏𝑒𝑛𝑒𝑓𝑖𝑡𝑠×𝐴′ 𝑠𝑐𝑜𝑠𝑡𝑠) 𝑓𝑟𝑜𝑚 𝐴 ′ 𝑠𝑐𝑜𝑛𝑐𝑒𝑠𝑠𝑖𝑜𝑛
𝐵′ 𝑠𝑟𝑎𝑡𝑖𝑜=∑ (𝐵′ 𝑠 𝑏𝑒𝑛𝑒𝑓𝑖𝑡𝑠× 𝐴′ 𝑠𝑐𝑜𝑠𝑡𝑠) 𝑓𝑟𝑜𝑚 𝐴′ 𝑠 𝑐𝑜𝑛𝑐𝑒𝑠𝑠𝑖𝑜𝑛∑ (𝐴′ 𝑠𝑏𝑒𝑛𝑒𝑓𝑖𝑡𝑠×𝐵′ 𝑠𝑐𝑜𝑠𝑡𝑠 ) 𝑓𝑟𝑜𝑚𝐵 ′ 𝑠𝑐𝑜𝑛𝑐𝑒𝑠𝑠𝑖𝑜𝑛
≅ 1
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Conceptual background
11/10/2011
Negotiating the Israeli–Palestinian controversy
Workshop AHP/ANPITA 2011
Matching concessions with corresponding gain/loss ratios in first meeting
Israeli’s Concessions Gain/Loss Palestinian’s Concessions Gain/Loss
Shared administration ofresources 1.03 Drop opposition to trade &
normal relations with Israel 1.03
Comply with UN resolutions
Right to economicDevelopment
7.27
Acceptance of noncontiguousstate
Incitement of anti-Israelisentiment in school
7.27
... ... ... ...
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Conceptual background
11/10/2011
Negotiating the Israeli–Palestinian controversy
Workshop AHP/ANPITA 2011
Matching concessions with corresponding gain/loss ratios in second meeting
Israeli’s Concessions Gain/Loss Palestinian’s Concessions Gain/Loss
Adhere to International law
Right to education1083
Accept two-state solution(Israeli control of Jerusalem)
Adhere to International law1084
Comply with UN resolutions
Right to a free economy,economic development & Trade
461
Accept a demilitarized Palestinian state (not including Jerusalem)
End of incitement of anti-Israeli sentiment in School
457
... ... ... ...
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Conceptual background
11/10/2011
An innovative orders-of-magnitude approach
Workshop AHP/ANPITA 2011
www.feg.unesp.br/~salomon 17
Conceptual background
11/10/2011
An innovative orders-of-magnitude approach
Workshop AHP/ANPITA 2011
www.feg.unesp.br/~salomon 18
Conceptual background
11/10/2011
An innovative orders-of-magnitude approach
Workshop AHP/ANPITA 2011
www.feg.unesp.br/~salomon 19
Conceptual background
11/10/2011
An innovative orders-of-magnitude approach
Workshop AHP/ANPITA 2011
www.feg.unesp.br/~salomon 2011/10/2011
Validation of Multi-criteria Decision-Making
1. Validation as a concept. Decision-making as a process
2. Performance of an MCDM method application3. Saaty’s, Garuti’s, and Salomon’s Compatibility
Indexes
Workshop AHP/ANPITA 2011
Process OutputInput
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Quality of the decision-making process
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S I P O CDecision Making
Decision Aid or Decision Support
Validation of a decision
SIPOC (Suppliers, inputs, process, outputs, customers) is a Six Sigma tool. It was invented by Prof. Edwards Deming in the 1950’s, the legend goes.
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Quality of the decision-making process
Workshop AHP/ANPITA 2011
S I P O CCulture,
Environment, Interests, Law, etc.
Morita, H. Contribution to decision process analysis of unstructured problems. PhD dissertation. S. Paulo: USP, 2003 [In Portuguese].
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Performance of an MCDM method application
Workshop AHP/ANPITA 2011
S I P O C
Paula, D.C.; Salomon, V.A.P. Using indicators in the performance analysis of multiple criteria decision-making methods application. Proceedings of XL SBPO. J. Pessoa: SOBRAPO, 2007 [In Portuguese].
QQuantity of data
SCompatibility Index
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Performance of an MCDM method application
Workshop AHP/ANPITA 2011
eBAe TT
nS
2
1
Ni
i
ii nnQ1 2
)1(
Alternatives AHP* ANP* ANP** Actual
Kmart 18 % 25 % 23 % 26 %
Target 18 % 15 % 21 % 19 %
Wal-Mart 64 % 60 % 56 % 55 %
S 1.046 1.018 1.008
Q 95 334 771
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Saaty’s and Salomon’s Compatibility indexes
Workshop AHP/ANPITA 2011
𝑆=( 1𝑛2 )𝒆𝑇 [ 𝑥𝑖𝑥 𝑗 ]⦁ [ 𝑦 𝑖
𝑦 𝑗 ]𝒆𝑉=( 1𝑛2 )𝒆𝑇 ¿
Three compatible vectorsi xi yi zi order(xi, yi, zi)
1 .450 .490 .499 1
2 .300 .300 .300 2
3 .200 .200 .200 3
4 .050 .010 .001 4
S = 1.63 S = 2.53 V = 1
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Garuti’s Compatibility index
Workshop AHP/ANPITA 2011
𝐺=∑min (𝑥𝑖 , 𝑦 𝑖 )max (𝑥 𝑖 , 𝑦 𝑖 )
(𝑥 𝑖+𝑦 𝑖 )/2
Three compatible vectorsi xi yi zi
1 .450 .490 .499
2 .300 .300 .300
3 .200 .200 .200
4 .050 .010 .001
G = .93 G = .98
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Supply Chain Management
1. Supplier selection of blanking dies2. Distribution center location3. Selection of third-party logistic provider
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Supplier selection of blanking dies
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www.feg.unesp.br/~salomon 2911/10/2011
Workshop AHP/ANPITA 2011
Supplier selection of blanking dies
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Workshop AHP/ANPITA 2011
Supplier selection of blanking dies
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Workshop AHP/ANPITA 2011
Supplier selection of blanking dies
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Normal Ideal Distribute
Supplier 4 18.15% 100% 25.93%
Supplier 3 17.53% 96.64% 25.06%
Supplier 1 17.32% 95.43% 24.75%
Supplier 2 16.98% 93.55% 24.26%
Supplier 5 15.17% 83.58%
Supplier 6 14.84% 81.76%
Supplier selection of blanking dies
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Distribution center location
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Distribution center location
Origin Central-West North Northeast South Southeast
Sao Paulo 7 17 12 4 5
Parana 8 18 13 3 6
Santa Catarina 8 18 13 3 6
Rio Grande do Sul 9 19 14 3 7
Delivery time in days
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Distribution center location
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Workshop AHP/ANPITA 2011
Distribution center location
Origin Ideal Normal
Sao Paulo 100.00% 55.61%
Parana 35.33% 19.65%
Santa Catarina 35.33% 19.65%
Rio Grande do Sul 9.16% 5.09%
Results with AHP application
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Workshop AHP/ANPITA 2011
Distribution center location
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Workshop AHP/ANPITA 2011
Distribution center location
Origin Ideal (ANP) Normal (ANP) Normal (AHP)
Sao Paulo 100.00% 39.00% 55.61%
Parana 70.33% 27.73% 19.65%
Santa Catarina 70.33% 27.73% 19.65%
Rio Grande do Sul 13.00% 5.12% 5.09%
Results with AHP application
G = .72S = 1.08
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Selection of third-party logistic provider
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Selection of third-party logistic provider
Level Performance
Excellent 1.00From excellent to very good 0.75
Very good 0.49
From very good to good 0.25
Good 0.10
Poor 0.06
Supplier B O C R PV1 PV2
1 35% 43% 20% 28% 33.2 % 36.1 %2 35% 27% 21% 38% 33.8 % 32.7%
3 30% 30% 39% 34% 33.0 % 31.2% G = .94