Abstract: Dealing with thecritical problem in supplier selection without considering the cooperativeindexes, we proposed a two-stage index assessment system. We also presented anumerical experiment using modified TOPSIS to demonstrate the system anddiscussed the results in managerial perspectives.

Key Words:  SupplyChain; Supplier Selection; TOPSIS

I  Introduction 

Due to the rapid development of moderntechnology and tougher competition for market share, the competition amongsupply chains has replaced the traditional competition among individualcompanies. Therefore, Supply Chain Management (SCM) has received unprecedentedattention in recent years, among which the establishment of strategicpartnership is the core issue of Supply Chain Management^[1]. 

The establishment of supply chain alliancerelationship stems from the suppliers selection of the core enterprise. In thisstage, the core enterprise should choose the proper supplier which can satisfyits operational capability. However, the very difference to the traditionalsupplier selection resides in the former has to establish the alliancerelationship with the suppliers step by step. The trust in the cooperativerelationship plays an extremely important role in the optimization of thesupply chain operation. The trust between the two parties is not easy in thesense that the enterprise has to adjust himself on both conceptual andstructural aspects. It must select the supplier very carefully in order to achievethe goal of “win-win”. The long term alliance relationships with the suppliersare seldom seen for the most enterprises in China. This is due to the neglectof a comprehensive and accurate assessment on the potential of cooperation whenselecting the suppliers at the very beginning. Hence, the motivation of thisstudy is to investigate and measure the potential of cooperation of thesuppliers in order to sustain a long term alliance relationship with them.