Using a Hybrid Multi-Criteria Decision Aid Method for Outsourcing Vendor Selection

Vendor selection is one of critical decision-issues in the theoretical and practical circles. Many researchers in the field of management have paid attention to the vendor selection. However, there is a few of literature that addresses the vendor selection in the outsourcing environment. Given the multi-criteria nature of outsourcing vendor selection decision, this paper argues nine factors, including, price, location, flexible contract terms, cultural match, reputation, existing relationship, commitment to quality, scope of resources, added capability, should be considered for selecting outsourcing vendors. Furthermore, the paper applies a hybrid AHP and PROMETHEE methods to outsourcing vendor selection. In applying the method, it shows that it is very well suited as a decision-making tool for outsourcing vendor selection according to the example analysis. Finally, potential issues for future research are presented.