A practical framework for supplier selection decisions with an application to the automotive sector

One of the most strategic materials used in automotive industries is galvanised steel sheets, of which 50% to 85% of the weight of each car is made. However, these materials with the desired specification cannot be produced in Iran and must be outsourced to foreign providers. Therefore, outsourcing has become an indispensable part of Iranian automotive industries and a cooperative buyer-provider relationship is essential to survive and to acquire a reasonable profit. A recent approach in MCDM models is the BOCR analysis of Benefits, Opportunities, Costs, and Risks which evaluate both positive and negative aspects of each provider. However, due to the incommensurability among the composite priorities on the four merit factors, different synthesis approaches introduced in BOCR may offer different orderings of alternatives; which can be confusing for decision-makers to reach a final decision. On the other hand, the VIKOR method determines a compromise solution which is the closest to the ideal in the presence of conflicting and incommensurable criteria. This paper suggests integrated VIKOR-AHP-BOCR to select the best providers of galvanised steel sheets for IKCO that is the largest Iranian automaker. The proposed model and defined criteria can be used as a comprehensive guide by other companies for this purpose.