Selection of Distributors for Small and Medium Enterprises in Visakhaptnam District by Using Analytical Hierarchy Process

Abstract

The activities of supply chain involve the transformation of natural resources,raw materials and components into a finished product that is delivered to the end customer.Flow of goods between a supplier and a customer passes through several levels in a supply chain mechanism and each level may consist of large number of facilities. A decision maker must consider decisions regarding the selection of the right distributors in the design of a supply chain and the selection of the distributors is a multi-criterion decision-making problem.

Distributors have long been relied on to serve as a bridge between manufacturers and customers. In today’s increasingly globalized marketplace, this link becomes even more important.

The distributors play a very important role in increasing the sales of a company’s products by ensuring the distribution of company’s products in most of parts of their area through the network of retailers and wholesalers. The importance of appointing right distributors is essential for a company whether it can be a Small, Medium and Large enterprisesbecause right distributors help the company march on path of progress and growth whereas “not right” distributors take the company backwards.

But in spite of the very important role of distributor in the supply chain it is matter of great concern that barring few top Indian and MNC companies, most of Indian companies do not take proper care and do not do proper homework before appointing a distributor. 90% of the time the distributors are appointed in a hurry just to meet month’s targets.

Therefore the focus of this paper is to determine the composite weight of the factors, which are considered in the selection of distributors. Analytical Hierarchy Process (AHP) is used in the selection of the distributors after conducting survey.