Risk based supplier selection using ELECTRE III (Case study: Supply of iron ore for Isfahan steel company)

Supply Chain Management (SCM) is an integrated process of decision making from supply of raw materials to consume of final product by ultimate customers. Selection of the most appropriate supplier is one of the key decision making issues where several qualitative and quantitative factors are involved. Due to the increasing of the complexity in supply chain، the uncertainty and the risk associated with are intensified. Hence supply chain risk management especially evaluation of suppliers risk has been paid more attention. In this study، firstly، suppliers risk in steel industries using blast furnace were identified and a hierarchical classification of risks (38 risk events in 3 levels) was suggested. Then، nine criteria for the evaluation of the risks were proposed. After that، for an accurate assessment of each supplier risks، a composite risk index based on the evaluation criteria and their importance weight is recommended. Finally، Isfahan steel company was selected as a case study and its mine suppliers was ranked with «ELECTERE III» method. The results indicated that Jalal-Abad and Shargh-Iran iron ore complexes have the lowest and the highest risk levels، accordingly.