Dynamic weights approach for off‐line sequencing of supplier selection over a finite planning horizon

Abstract

Purpose

The purpose of this paper is to develop a user‐oriented decision‐supporting applicable tool for selection of a single supplier out of a group of potential suppliers in a dynamic business environment over a finite planning horizon.

Design/methodology/approach

A qualitative and quantitative description of the impact of a change in one or several business environment parameters on current and future supplier choice; the methodology is accompanied by a visual representation of those impacts for the decision maker. The paper presents extended simulation experiments to test the proposed methodology.

Findings

A strategy of replacing suppliers over a definite planning horizon based on a forecast of the business environment is significantly (2‐9 per cent) more efficient than a strategy of relying on a single leading supplier throughout the planning horizon. This efficiency gain is greater the more the business environment is dynamic.

Practical implications

The proposed methodology is applicable to a broad range of service and manufacturing organizations that operate in dynamic business environments and rely on complex purchasing systems. Thanks to its simplicity, it can be applied to very large systems with a broad range of selection and/or environmental parameters.

Originality/value

Although the supplier selection process has been extensively studied, the literature still lacks appropriate reference to the effects of a dynamic business environment on this process.

Citation

Herbon, A., Moalem, S., Shnaiderman, H. and Templeman, J. (2012), "Dynamic weights approach for off‐line sequencing of supplier selection over a finite planning horizon", International Journal of Physical Distribution & Logistics Management, Vol. 42 No. 5, pp. 434-463. https://doi.org/10.1108/09600031211246500