Application of Analytical Hierarchy Process in SupplierAssessment from Environmental Perspective : A survey Study in Pan Nordic Logistics AB

Abstract: ABSTRACTNowadays the importance of environmental logistics is increasing while organizations are trying to pay more attention to their transport activities. Since PNL is a famous logistics company in Nordic countries and transport activates are done by sub contractors they intend to make sound environmental choices by assessing their suppliers from environmental performance in order to identify the best suppliers which is comply with the PNL environmental policy.In this project the survey study and questionnaire has been made in order to evaluate the supplier performance from environmental perspective. At first the investigation has been made for improving the previous questionnaire which was made by PNL. Some parts were revised according to researchers‟ knowledge, reliable references and suggestion of environmental consultant. Lots of study has been made in order to find the most importing effects that can affect environmentalism. Obtained results from questionnaire were analyzed and appropriate suggestions were given in order to enlighten the significant importance of environmental issues.Due to complexity of decision making environment, the applicable and reliable method should be applied to cope with complexity and the factors that can affect the objective while simplifying the process. Analytical Hierarchy process has been applied for this project in order to change the qualitative situation into quantitative manner to rate the suppliers based on their performance.The first step in AHP process is constructing hierarchy in two or more level for evaluating the alternatives. The goal of the project is environmental performance .Second level is criteria which has been made according to literature and the importance of them while the suggestions of consultant has been applied as well. Third level is sub criteria which are questions of questionnaire and finally the forth level include alternative which is suppliers.Next step in AHP process is weighting criteria and sub criteria and making pair wise comparison between them. Procedure of weighting is done by researchers and managers from PNL in order to decrease the subjectivity of decision making process. The result from suppliers has been investigated and points were given to them according to their performance and ability regarding environmental logistics.Sensitivity analysis was made for analyzing the result from AHP in order to investigate the responsiveness of the result.Key words: Logistics, Environmentalism, AHP Method, Supplier Assessment, Survey Study.