It is proposed to use fuzzy similarity in fuzzy decision-making approach to deal with the supplier selection problem in supply chain system. According to the concept of fuzzy TOPSIS earlier methods use closeness coefficient which is defined to determine the ranking order of all suppliers by calculating the distances to both fuzzy positive-ideal solution (FPIS) and fuzzy negative-ideal solution (FNIS) simultaneously. In this paper we propose a new method by doing the ranking using similarity. New proposed method can do ranking with less computations than original fuzzy TOPSIS. We also propose three different cases for selection of FPIS and FNIS and compare closeness coefficient criteria and fuzzy similarity criteria. Numerical example is used to demonstrate the process. Results show that the proposed model is well suited for multiple criteria decision-making for supplier selection. In this paper we also show that the evaluation of the supplier using traditional fuzzy TOPSIS depends highly on FPIS and FNIS, and one needs to select suitable fuzzy ideal solution to get reasonable evaluation.
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