Integrating DANP and modified grey relation theory for the selection of an outsourcing provider

Authors:
Chao-Che Hsu;James J. H. Liou;Yen-Ching Chuang
Affiliations:
Department of Transportation Management, Tamkang University, 151 Ying-Chuan Road, Tamsui, Taipei 251, Taiwan;Department of Industrial Engineering and Management, National Taipei University of Technology, No. 1, Section 3, Chung-Hsiao East Road, Taipei, Taiwan;Department of Industrial Engineering and Management, National Taipei University of Technology, No. 1, Section 3, Chung-Hsiao East Road, Taipei, Taiwan
Venue:
Expert Systems with Applications: An International Journal
Year:
2013

Citing 8
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Abstract

Globalization has inevitably forced firms to pursue outsourcing as a strategy to reduce operating costs and improve their competitiveness in the global marketplace. However, a successful outsourcing activity depends on the selection of the appropriate provider. Unlike previous multiple criteria decision-making (MCDM) methods that assume the criteria are independent, we propose a novel hybrid model, combining a Decision Making Trial and Evaluation Laboratory (DEMATEL) and Analytical Network Process (ANP) method called DANP, which addresses the dependent relationships between the various criteria to better reflect the real-world situation. At the same time, instead of ranking the alternatives, we apply a modified grey relation method to select and improve the criterion-gaps to the aspiration levels. To demonstrate the usefulness and effectiveness of the proposed model, we use data from a Taiwanese company.