Decision support system in supplier selection in oil and gas sector in Oman by applying multiple fuzzy MCDM techniques

BFP/GRG/EI/23/078

Decision support system in supplier selection in oil and gas sector in Oman by applying multiple fuzzy MCDM techniques

Abstract

Procurement plays an essential importance in the developing oil and gas industry, especially now that oil prices are at critical levels, thus finding the right vendor to meet the firm’s needs is critical to the firm’s supply chain management success. The Multi-Criteria Decision-Making(MCDM) techniques are inextricably tied to supplier selection. They are useful techniques to tackle complicated decision-making problems involving several criteria and alternatives, especially when dealing with multiple qualitative and quantitative factors. This research studies the ranking of suppliers in oil and gas industry. In doing so, in phase one, the most relevant qualitative and quantitative criteria are determined, then, in phase two, Fuzzy Analytical Hierarchy Process (FAHP) is developed to weigh the importance level of the related criteria. In phase three, multiple MCDM techniques (e.g., TOPSIS, ELECTRE II, PROMETHEE II, VIKOR, ORESTE, and COPRAS) are used to rank the suppliers. The fuzzy concept is incorporated to these techniques whenever needed. Lastly, in phase four, according to Spearman ranking correlation coefficients obtained comparing the rankings in different techniques, some other MCDM methods (i.e., REGIME and QUALIFLEX) are used to provide a coherent definitive ranking. The real-world data from one or some famed important companies in oil and gas sector in Oman is applied. This study can provide a very useful insight for the policy and decision-makers to decide strategic and tactical cooperations with their suppliers.