Probabilistic Approach to Multi-Stage Supplier Evaluation: Confidence Level Measurement in Ordinal Priority Approach.

Area of Science:

• Operations Research
• Decision Sciences
• Supply Chain Management

Background:

• Existing supplier selection frameworks lack comprehensive screening of criteria and evaluators.
• Current methods struggle with supplier selection requiring confidence or trust measures.
• De Boer's framework is extended to address these limitations in supplier evaluation.

Purpose of the Study:

• To develop a probabilistic approach for supplier evaluation and selection under incomplete information.
• To introduce a novel Confidence Level measure for assessing supplier reliability.
• To enhance decision-making in supplier selection by evaluating criteria and evaluators.

Main Methods:

• Utilizes statistical theory and the Ordinal Priority Approach (OPA).
• Pioneers a probabilistic supplier evaluation method.
• Introduces a novel Confidence Level measure and W-distribution for probability assessment.

Main Results:

• The study proposes a probabilistic framework for supplier evaluation.
• A novel Confidence Level measure is introduced to quantify selection certainty.
• The W-distribution explains the probability of a supplier being the optimum choice.

Conclusions:

• The proposed approach enhances supplier selection by evaluating criteria and evaluators.
• It provides a probabilistic method to prevent the selection of suboptimal suppliers.
• The study contributes to multiple-attribute decision-making and intelligent decision support systems.