Applying an İntegrated methodology of Supplier Selection with a Kraljic Matrix-based Strategic Decision-Making Tool 

Abstract

This paper offers a combined methodology to supplier selection problem which includes a multi-criteria decision making (MCDM) and total cost of ownership (TCO) approaches. The decision is made with the help of Pareto algorithm, which excludes suboptimal variants. The remaining suppliers are assessed using the strategic decision matrix based on a quantified and adopted to supplier evaluation Kraljic portfolio matrix. The introduced supplier selection method allows to compare financial benefit and potential risks, and make a strategically reasonable decision in the process of strategic sourcing or purchasing category management.