Multiple criteria model for evaluation and selection of outsourcing service countries: A case study in the East and Southeast Asia

Outsourcing has for some time been, considered as one of the most effective strategies by which firms may reduce costs and sustain their competitive advantages over rivals. Making an outsourcing decision is a very complex process because it requires decision-makers (DMs) to make a comprehensive evaluation of multiple criteria which often conflict with each other. The evaluation and selection of these countries is therefore basically a multi-criteria decision making problem (MCDM). Over the last two decades, there is a great number of method have been introduced to deal with MCDM problems, so it would be more perfect to look at MDCM methods as a whole. For these reasons, the purpose of this paper is to review the literature of MCDM methods, and thereby to construct a simple MCDM-based model to help managements evaluate and select the best outsourcing location for their companies. The study utilized the AHP approach as an empirical example to confirm the usefulness of the MCDM-based model based on seven typically emerging countries chosen from the East and Southeast Asia regions. In short, the research provides general view and practice for readers and DMs in relation to the problem of outsourcing destination selection.