3.1. Overview of Proposed Approach: A Hybrid Fuzzy AHP and TOPSIS System for Supply Chain Resilience Enhancement
Through a combination of empirical analysis and the development of a hybrid fuzzy AHP (FAHP) and TOPSIS system, this paper endeavors to uncover how transportation logistics can be first described under an umbrella of appropriate KPIs or criteria. It will then showcase the analysis of such criteria to pinpoint high-risk points and, finally, propose strategies and solutions that leverage fuzzy logic analysis to enhance resilience. The significance of this study lies in its potential to contribute to the advancement of supply chain management practices, fostering adaptability and responsiveness in the face of uncertainties [
11,
31].
The two hybrid fuzzy approaches consist of two main processes. FAHP calculates the relative importance of selected criteria and sets appropriate weights [
32]. The second process is TOPSIS, which compares a set of alternatives based on a pre-specified criterion. This method is used in business across various industries whenever there is a need to make an analytical decision based on collected data [
33].
First, expert pairwise comparison decisions are inserted as whole-number preferences; however, they are translated into fuzzy inputs decoded into triangular fuzzy numbers. In other words, they are changed into interval forms using a linguistic terms profile. Triangular inputs are introduced into the fuzzy AHP system to establish the criteria weights, which are then used as inputs to the TOPSIS model. To initiate the TOPSIS method, alternatives must be established against specific criteria. Again, expert decisions need to be fed as input to determine the extent to which the proposed alternatives or solutions are connected or influenced by the set criteria. The result will be to rank the other options from best to worst [
34,
35].
This two-step hybrid approach identifies the most critical criteria based on the highest weight. As a result, it highlights the most critical point to consider when a potential risk arises, as this is where the threat to the supply chain is most likely to occur. In response, the TOPSIS method identifies possible alternatives or solutions that can be implemented either before the risk occurs or during the risk to mitigate its adverse impact significantly. The solutions are ranked, and the highest-weight criteria indicate the highest potential for problems in the supply chain. The highest alternative rank represents the best possible solution to implement before that problem occurs.
Figure 1 presents a summary of the proposed methodology and the chronological steps of action.
Two real-life case studies were examined to validate this approach, each representing a distinct form of supply chain (i.e., manufacturing and transportation). For each case study, data were collected from expert managers within supply chain organizations and entered into the fuzzy AHP and TOPSIS generators, which were initialized, created, and constructed through the proposed system in this work. This system generates criteria weights based on the criteria assigned to the supply chain field and ranks the proposed alternatives.
The proposed method comprises several inputs and outputs, as demonstrated in
Figure 2, which presents a block diagram of the input/output flow for this proposed methodology. The following steps briefly explain the block diagram flow to achieve the highest risk weight and the best alternative to mitigate it:
- 3.
Evaluate the state of the expert input data. To start the data fuzzification process, the data should be discrete for entry into the first generator (i.e., fuzzy linguistic terms). The values are fuzzified into triangular fuzzy numbers for each discrete data scale to be presented as fuzzy inputs.
- 4.
Initialize the second generator (i.e., fuzzy AHP). In this block, pairwise comparisons are carried out to generate the weights for each criterion.
- 5.
Establish the appropriate alternatives that present the proposed solutions for transportation disruptions in the chosen supply chain system. The experts can again select these alternatives or conduct thorough research to suggest appropriate solutions based on the selected supply chain. This system integrates six alternatives.
- 6.
Input expert preferences that compare the relevance of each criterion to the corresponding alternative. The expert input data should also be on a scale from 1 to 9. In the scale, values of 9 are the most relevant, and values of 1 are the lowest. In addition, it is highly recommended and more effective to use the same experts, as in step 2, to input the data for the TOPSIS analysis.
- 7.
Initialize the third and final generator (i.e., TOPSIS). In this block, the main aim is to use the previously calculated criterion weights in the fuzzy AHP block as inputs to establish connections between the criteria and the alternatives. Here, the objective is to find the shortest distance to the positive ideal solution and the longest to the negative ideal solution. The outcome calculates the relative closeness for the alternatives and their rankings from highest to lowest. The highest rank corresponds to the best possible solution to implement.
3.4. Linguistic Terms
For this proposed methodology, expert preferences for comparing criteria are collected using a 1–9 scale. The corresponding nine principal linguistic term translations, illustrated in
Table 3, are applied to interpret these inputs. Data is gathered by asking experts the following two questions for each pairwise comparison:
Which criterion is relatively more important?
For the chosen criteria, how much is it relatively more important than the other criteria on a scale from 1 to 9?
Figure 3 captures the setup scale for collecting expert input. The two stated questions are set up as headers. Either criterion 1, criterion 2, or both are set as answers to the first question, and a scale from 2 to 9 is set as answers to the second question. However, as stated previously, the expert preferences should be given on a scale from 1 to 9. Here, a value of one is considered equal and thus automatically corresponds to the third option in question 1, as both are equal.
While the inputs are initially discrete numerical values (2–9), they are not considered fuzzy. Therefore, linguistic terms are used to translate these values into triangular fuzzy numbers.
Table 3 summarizes the discrete values, corresponding linguistic terms, and their triangular fuzzy representations. Each discrete value is converted into a range in the following format:
However, the experts’ choice between the criteria that matter compared will affect how the triangular fuzzy numbers are input into the second block, as detailed in
Appendix A (i.e., FAHP). There are two possible scenarios:
Scenario 1: Criterion 1 is relatively more important than criterion 2.
For this scenario, the triangular fuzzy number is translated into whole numbers, as shown in
Table 3 and demonstrated in
Figure 4. For example, if an expert selects criterion 1 as more important by a scale of 4, the corresponding fuzzy number is applied.
Scenario 2: Criterion 2 is relatively more important than criterion 1.
For this scenario, the triangular fuzzy number is translated as fraction numbers, where the inverse of the fuzzy triangular numbers is taken, as shown in
Table 3 and
Figure 5. For example, if an expert selects criterion 2 as more important by a scale of 4, the corresponding fuzzy number is applied.
3.5. Fuzzy Analytic Hierarchy Process (FAHP)
After the fuzzification process is completed, the second block is initiated. All triangular fuzzy inputs for the criteria comparisons are entered into a pairwise comparison matrix, and the weighted criteria are then generated. The primary concern is the highest weight, as it represents the criterion with the highest potential to create a high risk for the supply chain.
Figure 6 showcases a summary of the inputs and outputs of the hybrid fuzzy AHP generator.
Multiple fuzzy AHP methods prioritize inputs. This proposed method uses the geometric mean method. The entire algorithm was constructed from scratch in Microsoft Excel to create two hybrid fuzzy AHP and TOPSIS generators that any supply chain expert can utilize efficiently. The fuzzy set for the proposed methodology is defined by the steps mentioned below:
Suppose
X is a universe of interest and
x is a particular element of
X. In that case, a fuzzy set
A defined on
X can be represented as a collection of ordered pairs, where each pair consists of an element
x and its corresponding degree of membership
μA(
x). This degree reflects the extent to which
x belongs to the fuzzy set
A. Formally, the fuzzy set can be written as Equation (1).
Figure 7 represents the membership functions of two triangular fuzzy numbers,
M1 and
M2. Each fuzzy number is defined by three parameters: a lower limit (l), a modal (or peak) value (
m), and an upper limit (
u). Specifically,
M1 = (
l1,
m1,
u1) and
M2 = (
l2,
m2,
u2). At the lower and upper limits, the membership degree
μm is 0, while at the modal value, it reaches the maximum membership degree of 1. The figure also illustrates the degree of possibility
V(
M2 ≥
M1), which expresses the extent to which fuzzy number
M2 is greater than or equal to
M1.
Step 1: Pairwise comparison matrix construction
After the fuzzy triangular number translations (i.e., linguistic terms), the first step is to create a matrix based on the experts’ preference inputs. Each element of the matrix represents the preference or importance of one element over another as input by the experts. An example of the matrix used to begin the fuzzy AHP procedure is shown in
Table 4.
Under each criterion, the cells were divided into three slots to present the fuzzy triangular numbers. The diagonal line of the matrix is represented as
, since each criterion is considered equal when compared to itself. Assuming
A is the decision matrix of dimensions
, since this proposed methodology utilizes the capacity of a maximum of five criteria or KPIs (for further analysis, the number of criteria incorporated can be easily increased or decreased). Equation (2) presents the mathematical representation of the decision matrix considering five criteria, where each element
is a fuzzy number defined by its lower, modal, and upper values
.
After constructing the upper triangular part of the pairwise comparison matrix, the lower triangular elements must be derived to complete the matrix. This is achieved by taking the multiplicative reciprocal of the fuzzy triangular numbers in the upper triangle, as defined in Equation (3). Specifically, for each fuzzy number
Aij = (
l,
m,
u), its reciprocal is calculated as:
Each expert judgment between a pair of criteria is represented by three values: a lower bound l, a modal (most likely) value m, and an upper bound u, which collectively capture the range and central tendency of the assessment. These values are initially recorded in the upper triangle of the matrix.
The corresponding values in the lower triangle are calculated as reciprocals of those in the upper triangle. Specifically:
The lower bound (L) of the reciprocal is the inverse of the maximum value of the three values, as in Equation (4), ensuring that the strongest original preference corresponds to the weakest in reverse:
The upper bound (
U) of the reciprocal is the inverse of the minimum value, as in Equation (6), reflecting the highest confidence in the reversed comparison:
Step 2: Geometric mean calculation
After completing the pairwise comparisons, the next step in the fuzzy AHP process is to calculate the geometric mean of the judgments. This is important because decision-makers may sometimes provide extreme values, either very low or very high, during pairwise comparisons. Calculating the geometric means helps reduce the influence of these outliers and prevents any single extreme judgment from disproportionately affecting the results. As a result, this method provides a more balanced, objective, and mathematically sound aggregation of preferences, leading to a fair representation of the collective judgments. Equation (7) describes the mathematical representation for calculating the geometric mean (
ri).
Aj = (
lj,
mj,
uj) denotes the triangular fuzzy number representing the comparison of criterion
i to criterion
j, where
lj,
mj, and
uj correspond to the lower, modal, and upper bounds, respectively. The operator ⊗ represents fuzzy multiplication, and n is the total number of criteria considered in the pairwise comparison.
Step 3: Fuzzy weight vector (fuzzy form) calculation
After calculating the geometric mean, the fuzzy weights (fuzzy triangular form,
Wi) can be calculated using Equation (8). However, to simplify the calculation procedure, a couple of extended formulas can be applied as follows:
- 1.
The sum of the geometric means across all five criteria for the lower, modal, and upper limit, respectively, is calculated, as shown in Equations (9)–(11):
- 2.
The inverse of the three triangular fuzzy limit summations is calculated. This is achieved by taking the inverse of each geometric sum across the three limits, as demonstrated in Equations (12)–(14):
- 3.
The increasing order of the inverse geometric sums is calculated. Since in FAHP, fuzzy triangular numbers are being dealt with, it is necessary to calculate the fuzzy weights correctly by having each limit value in a single triangular fuzzy number (lower, modal, upper) correctly cross-multiplied with the corresponding inverse geometric value. To achieve this, Equations (15)–(17) need to be applied.
- 4.
In the final step, the fuzzy weights are computed by multiplying each component of the triangular fuzzy number, namely the lower, modal, and upper limits associated with each criterion, by the corresponding values from the ordered inverse geometric means. This element-wise multiplication preserves the fuzzy structure of the data and results in a set of fuzzy weights that reflect the relative importance of each criterion. To validate the fuzziness of the results, the aggregated modal values of the criteria can be checked; if their total exceeds one, it confirms the fuzzy nature of the weights, which may go beyond the normalized upper limit of values.
Step 4: Normalized weights: (non-fuzzy form) calculation
The proposed method adopts a hybrid multi-stage process that requires the input of normalized, non-fuzzy weights for subsequent decision-making analysis, such as integration with classical methods like TOPSIS. Therefore, the fuzzy weights must first be defuzzied and then normalized to yield crisp values. The defuzzification is typically performed by computing the average of the lower, modal, and upper limits of each triangular fuzzy number. These crisp values are then normalized to ensure their sum equals one, as shown in Equation (18).
where
Wi is the defuzzied weight of the
ith criterion, and
n is the total number of criteria.
This normalization ensures that the resulting weights are dimensionless and sum to unity, making them suitable for input into classical multi-criteria decision-making frameworks. After normalization, the criteria can also be ranked in descending order of their importance based on the magnitude of these weights; ranks are given from largest (1) to smallest (5).
3.6. Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS)
After the normalized criteria weights are established through the FAHP process, it can be concluded that the highest-weight criterion demonstrates the highest possible point of risk. However, finding an appropriate solution or alternative is critical to make this proposed method more effective and valuable in achieving supply chain resilience. That is why a second AI-based methodology is used (i.e., TOPSIS). The following are the steps to perform TOPSIS and their corresponding translation into the developed algorithm.
Step 1: Expert input (alternative preferences)
Expert input is entered, describing the user’s ratings from 1 to 9 in terms of the level of relation between a criterion and a matrix of alternatives. The closer the ratings are to 9, the higher the relationship between a specific criterion and a particular alternative, and vice versa. This paper has five criteria/KPIs, whose weights are transported from the fuzzy AHP analysis, and six proposed alternatives/solutions. An illustrative example of the input matrix is presented in
Table 5.
Step 2: Intermediate criteria vs. alternatives matrix for normalization
To prepare for normalization, an intermediate matrix is generated by squaring each value in the original decision matrix
X = [
xij], where
I = 1, 2…, m denotes alternatives and
j = 1, 2…,
n denotes criteria. For each column
j, the sum of squared values is computed as per Equation (19).
Then, the square root of each column sum is calculated to serve as normalization denominators in the next step to let all values in each column be scaled relative to the same magnitude.
Step 3: Normalization of the matrix
The normalized matrix
R [
rij] is computed by dividing each original matrix element
xij by the square root (
Sj) of the sum of squares of its respective column as per Equation (20).
Step 4: Weighted normalized matrix and ideal solutions
As mentioned previously, the main values required for the TOPSIS method are the positive and negative ideal solutions. To calculate them, a weighted normalized matrix is first generated
V [
Vij], which is achieved by simply multiplying the normalized matrix
by the criteria weights
obtained from the FAHP analysis. Each criterion weight is multiplied by its corresponding column, as demonstrated in Equation (21).
Next, the simple maximum and minimum formulas are used to calculate the positive ideal solution
A* and negative ideal solutions
A− for each criterion j, as shown in Equations (22) and (23).
Step 5: Calculation of Euclidean distances
After establishing the positive and negative ideal solutions
, the next step is to measure the distances from each point to each ideal solution to develop the closest alternative to the positive ideal solution and the furthest alternative to the negative ideal solution. The distance from the ideal positive solution
and negative ideal solution
can be calculated using Equation (24) and Equation (25), respectively.
Step 6: Calculation of the relative closeness to ideal solution (performance score) and ranking
The final step in TOPSIS is to calculate the relative closeness to the ideal solution, or, in other words, the performance scores. This ultimately gives the best possible solution application under the given criteria weights. Overall, the deduced best alternative (i.e., rank 1) solution is considered the optimal solution to apply to the supply chain system, aiming to severely reduce risks, particularly the highest point of risk, which concerns the criterion with the most significant weight calculated in FAHP. Equation (26) illustrates how the Euclidean distances, derived for the negative and positive ideal solutions, are used to calculate the performance scores
.
The alternative solutions can then be ranked from best to worst based on the final calculated performance scores.