Fuzzy analytical approach to partnership selection in formation of virtual enterprises

The main objective of this paper is to present a new fuzzy approach to partnership selection in the formation of virtual enterprises. The phases of the virtual enterprise life cycle are briefly described and it is shown that the partnership selection is a key factor in the formation of such complex organisations. It is justified that the partnership selection process should be formulated as a multiple criteria decision-making problem under uncertainty. A new fuzzy programming method is proposed for assessment of uncertain weights of partnership selection criteria and uncertain scores of alternative partners, in the basic framework of the Analytic Hierarchy Process. The proposed fuzzy prioritisation method uses interval pairwise comparison judgements rather than exact numerical values of the comparison ratios and transforms the initial prioritisation problem into a linear program. The method can derive priorities from inconsistent interval comparison matrices, thus eliminating the drawbacks of the existing interval prioritisation methods. Moreover, the method generalises the known prioritisation methods, since it can be used for deriving priorities from exact, interval or mixed comparison matrices, regardless of their consistency. A numerical example, illustrating the application of this method to partnership selection process is given. © 2002 Elsevier Science Ltd. All rights reserved.