The procurement of goods/services has an important role in providing profits for the company and avoiding losses. PLN UP3 Bontang is currently facing challenges in assessing vendor performance that has not been effective, including its follow-up, as well as the absence of rules related to vendor selection which causes the procurement process to take longer. This research aims to design a vendor performance appraisal model to develop an effective and efficient vendor management system. The research method used Focus Group Discussion (FGD) with experts to identify assessment criteria, then applied the Analytic Hierarchy Process (AHP) method to determine the weight of the criteria and the Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) for vendor ranking. The results showed six main criteria: sanctions (25.5%), quality & quantity (22.8%), time (14.9%), service (14.1%), K3 management (12.2%), and financial vendor (10.4%). Evaluation of five jaskonhar vendors showed that PT SE obtained the highest rating with a preference value of 0.903, while PT PM was in the lowest position with a value of 0.051. This model provides an objective basis for strategic decision-making in vendor management and strengthens long-term cooperative relationships between companies and vendors.
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