Citation:

Inayah Chaerunnisa, Pri Hermawan. "Improving Supplier Selection Process Using Analytical Hierarchy Process (AHP) and Framework ISO 31000:2018 (Case Study: Picante Noodles Company)" International Research Journal of Economics and Management Studies, Vol. 4, No. 3, pp. 91-98, 2025.

Abstract:

Picante Noodles Company (PNC) faced challenges in supplier selection and risk management. The ambiguity of supplier criteria in choosing a supplier for raw materials and the lack of structured risk management add to these issues. The research aims to identify and prioritize criteria for supplier selection, assess associated risks, and propose strategies to improve decision-making. Using the Analytical Hierarchy Process (AHP) and framework ISO 31000:2018 as guidelines, criteria such as quality, cost, production, synergy, and financial factors were evaluated. Results revealed that Quality is the most critical criterion (31.5%), followed by Cost (23%), Production (21.7%), Synergy (13.1%), and Financial (10.7%). Key risks identified include issues with product quality, fluctuating costs, production delays, problems with supplier relationships, and financial instability of suppliers. These risks can disrupt the supply chain and negatively impact the business. Risk assessment found Cost and Production risks to be the most significant, followed by moderate quality risks, and then synergy and financial risks posed lower but still notable concerns. To address these findings, the research recommends adopting a structured AHP-based supplier selection framework, enhancing quality assurance, optimizing cost management, and developing targeted risk mitigation strategies. By implementing these recommendations, PNC can improve supplier selection, mitigate risks, and strengthen its supply chain resilience. Future research could explore dynamic weighting models and industry comparisons to refine the framework further.

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Keywords:

AHP, ISO 31000:2018, Risk Management, Supplier Selection.