Research on Risk Evaluation in Supply Chain Based on Grey Relational Method

Abstract

Supply chain risk evaluation is a multi-criteria decision making problem under fuzzy environments. To tackle the problem, this paper firstly identifies and discusses some of the important and critical decision criteria and constructs the evaluation indicator framework. Then this paper presents a modified grey relational analysis method based on the concepts of ideal and anti-ideal points. In the method, the weight information is partially known and the vagueness and subjectivity are handled with linguistic terms parameterized by triangular fuzzy numbers. Besides, a single objective programming model is developed to determine the relation degree between every alternative and positive ideal point or negative ideal point. By solving the programming model, the weight vector of criteria is calculated. The alternatives are ranked by the relative relation degree. Finally, a case study is given to demonstrate the proposed method’s effectiveness.