Supplier selection problem: integrating DEA with the approaches of total cost of ownership and AHP

Purpose – This paper seeks to propose a methodology to integrate the total cost of ownership (TCO) and the analytical hierarchy process (AHP) approaches for selecting appropriate suppliers for a firm. Design/methodology/approach – This paper suggests an interesting way of combining the objective and subjective information provided by the results of the TCO and AHP approaches through the application of data envelopment analysis (DEA). Findings – Three different versions of DEA models have been used to illustrate the integration of TCO and AHP. Research limitations/implications – The integration of DEA with TCO and AHP can be extended to more complex situations, including assessment of risk behaviour of suppliers and including fuzzy concepts. Practical implications – The proposed integrated model could be used for supplier selection, which involves several quantitative and qualitative factors. Originality/value – To the best of the author's knowledge, the proposed integrated DEA‐TCO‐AHP model is the first of its kind to be applied for the supplier selection problem.