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The Application of Multi-Objective Decision Making in Selecting an Optimal Supplier of Solids Control Equipments for Santos

Kamarudin, Nor Khairy

Engineering Honour Degree, 2006

University of Adelaide

Executive Summary

Decision making is not easy especially when it involves multiple and competing objectives that need to be fulfilled simultaneously. Selecting the best supplier of solids control equipments for Santos falls into this category. This project proposes a possible solution to the problem faced by the company based on the method of MODM. This method has been proven to be very useful and is able to provide insights that will be very helpful in guiding decision making processes.

In this project the method was initiated by framing the decision context which involves laying out the objectives that needs to be fulfilled by the suppliers generating the list of suppliers themselves. The objectives are presented in a formalized structure called a value hierarchy to assist in communication and development of an accurate list of the objectives. Next, the list of alternatives is generated to determine the optimal solution to the decision making problem in this project

The framing process is followed by the modeling process where one will be able to come up with an overall weighted value for each alternative so that one can rank those alternatives. This is achieved by finding or generating the scores for each alternative in terms of each objective using the appropriate attributes or measurement scales. The scores are then converted to values using value function and then added up for each alternative to be ranked.

Once modeling is completed, an assessment of the MODM process was carried out. Trade-off analysis was performed to determine the worth of getting extra benefits by paying additional costs. Sensitivity analysis was conducted to test the robustness of the decision making process towards the weight assigned for each objective, which was perceived as a crucial parameter.  It turns out that the choice of supplier for this MODM problem is robust indeed.

The results of the MODM analysis are presented and discussed in this report. The main finding from the results is that the MODM method has mainly provided results which are consistent with the intuitive thinking of how the decision for this project should be made. Following that, it is recommended that either Supplier 1 or Supplier 3 is to be considered as the supplier for the solids control equipment depending on the pre-determined criteria.


Australian School of Petroleum
THE UNIVERSITY OF ADELAIDE

SA 5005 AUSTRALIA

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