Contractor Analysis via Fuzzy MADM Techniques with Independent and Interdependent Relationships

Applying an appropriate process for using the history of previous interactions with contractors in future relations with it has an important role in an organization’s success with regards to its outsourcing process. The present mechanism for contractor evaluation and selection is only based on inviting companies with some needed specification to the tender and then only focusing on their bid price, which causes many difficulties for organizations. However, if it is possible to take into account their past performance evaluations as one of the effective decision factors to invite contractors into future limited tenders, many of those problems will be resolved.Contractor evaluation is a Multiple Attribute Decision Making (MADM) problem, which uses numerous and complex criteria. In many cases, sub-criteria, which form main criteria, have dependencies and interrelations to each other. This makes it difficult to use conventional MADM methods, which are built based on primary assumption of criteria independence, in such a case. The purpose of this research is to rank contractors based on previous performance while considering the dependency between criteria. This study uses a hybrid fuzzy integral technique for modeling this problem and allows solving it within the situation of interrelated criterions. Here, the group analytical hierarchy process (AHP) technique is used to determine the weight of each criterion, Interpretive Structural Modeling (ISM) is employed to map out internal relationships among the sub criteria, and fuzzy integrals are used to obtain the fuzzy syntheticperformance of sub criteria to form each main criterion. The results obtained from comparing this model with the conventional AHP method, both with and without considering interrelations among sub criteria have shown. There is a modification and rearrangement in ranking the contractors based on the proposed approach.