A Comprehensive Review of Vendor Evaluation and Vendor Rating Methods in Supply Chain Management

Abstract

Vendor evaluation and vendor rating play a crucial role in modern supply chain management because the performance of suppliers directly influences product quality, cost efficiency, and delivery reliability. Organizations must adopt systematic approaches to evaluate and select the most suitable vendors from multiple alternatives. This review paper analyzes existing research on vendor evaluation and vendor rating methods by examining seventeen significant studies related to supplier selection and supplier performance assessment. The review shows that vendor evaluation is a multi-criteria decision-making problem that involves both quantitative and qualitative factors such as cost, quality, delivery performance, reliability, technological capability, and supplier relationship management. Earlier approaches mainly relied on traditional vendor rating techniques such as categorical methods and weighted scoring models, whereas recent studies emphasize advanced decision-making methods including Analytic Hierarchy Process (AHP), Analytic Network Process (ANP), TOPSIS, and fuzzy-based multi-criteria decision-making techniques. These modern approaches help decision makers handle complex supplier selection problems more effectively and improve the accuracy of vendor ranking. The review also highlights emerging evaluation factors such as sustainability, communication capability, and innovation, which are becoming increasingly important in contemporary supply chains. Overall, this study provides a comprehensive overview of vendor evaluation methodologies and identifies future research opportunities for developing more robust, integrated, and data-driven vendor assessment models.