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Article
Publication date: 4 February 2014

Boonlert Watjatrakul

Most firms select their information technology outsourcing (ITO) vendors based on the two methods of the weighted-criteria evaluation technique – the “qualification score plus the…

1872

Abstract

Purpose

Most firms select their information technology outsourcing (ITO) vendors based on the two methods of the weighted-criteria evaluation technique – the “qualification score plus the lowest bid price for the highest price score (QS-LBHPS)” and the “qualification score plus the average bid price for the middle price score (QS-ABMPS).” This paper aims to understand whether these two methods provide the same or different results of vendor selection and how the proportional weights of a vendor's qualification and bid price affect the vendor selection results under the two methods.

Design/methodology/approach

–In total, 1,000 experimental tests were carried out using the developed spreadsheet template to examine vendor selection results of the two methods (QS-LBHPS and QS-ABMPS) and compare the vendor selection results under three conditions of vendors’ qualification and price weights. A correspondence analysis was also used to determine the proximal relationships among the selection results of the weighted criteria technique under the comparable methods.

Findings

The results indicate that, when using the two methods of the weighted criteria technique for a vendor selection, the selection results are significantly correspondent. In addition, the proportions of qualification and price weights affect the selection results under the two methods. The different proportions of qualification and price weights under the two methods yield the same selection results rather than different results.

Originality/value

This study fills the gap in ITO literatures concerning the vendor selection strategy. No empirical studies have been undertaken to compare the results of vendor selection under the two methods of the weighted-criteria evaluation technique. The findings enable a firm's selection team to apply the weighted-criteria evaluation technique effectively and realize that vendor selection results are altered based on the predefined proportions of qualification and price weights.

Details

Journal of Enterprise Information Management, vol. 27 no. 2
Type: Research Article
ISSN: 1741-0398

Keywords

Article
Publication date: 11 April 2016

Mohd Nishat Faisal and Syed Asif Raza

The purpose of this paper is to understand the reasons behind the intent for information technology (IT) outsourcing in academic institutions in GCC countries. It also aims to…

Abstract

Purpose

The purpose of this paper is to understand the reasons behind the intent for information technology (IT) outsourcing in academic institutions in GCC countries. It also aims to develop a multi-criteria decision model (MCDM) to aid the critical decision of IT outsourcing vendor selection.

Design/methodology/approach

The research utilizes a questionnaire-based survey to investigate reasons of IT outsourcing intent and the factors considered important for IT outsourcing vendor selection in academic institutions. The results of questionnaire-based study were utilized to develop a grey theory-based MCDM for vendor selection.

Findings

The results show that facilitating access to new technology, focus on core-competence, saving staff costs, and improved customer service are the most important factors for IT outsourcing intent while reputation of vendor, access to the state of art technology, quality of service, and knowledge of industry were considered as the most important factors for IT outsourcing vendor selection. Grey theory-based decision model was applied to a real case to facilitate the decision of selection of an IT outsourcing vendor.

Practical implications

Academic institutions that plan to outsource IT in future would be the major beneficiaries of this study. They can utilize the multi-criteria model to select the best vendor. The model facilitates a more rational decision making as it incorporates several criteria considered important for IT outsourcing vendor selection.

Originality/value

This study contributes to the body of research on IT outsourcing. It is first of its kind with its focus on academic institutions in GCC countries where currently education is a priority and IT is a backbone for its delivery. Another novelty of this research is that it propose a MCDM for IT outsourcing vendor selection. The findings of this study would serve as a guide to those institutions that intend to outsource IT functions to meet the ever growing needs of managing IT effectively.

Details

Journal of Enterprise Information Management, vol. 29 no. 3
Type: Research Article
ISSN: 1741-0398

Keywords

Article
Publication date: 8 May 2019

Syed Mohd Muneeb, Mohammad Asim Nomani, Malek Masmoudi and Ahmad Yusuf Adhami

Supplier selection problem is the key process in decision making of supply chain management. An effective selection of vendors is heavily responsible for the success of any…

Abstract

Purpose

Supplier selection problem is the key process in decision making of supply chain management. An effective selection of vendors is heavily responsible for the success of any organization. Vendor selection problem (VSP) reflects a more practical view when the decision makers involved in the problem are present on different levels. Moreover, vendor selection consists of various random parameters to be dealt with in real life. The purpose of this paper is to present a decentralized bi-level VSP where demand and supply are normal random variables and objectives are fuzzy in nature. Decision makers are present at two levels and are called as leader and follower. As the next purpose, this paper extends and presents a solution approach for fuzzy bi-level multi-objective decision-making model with stochastic constraints. Different scenarios have been developed within a real-life case study based on different sets of controlling factors under the control of leader.

Design/methodology/approach

This study uses chance-constrained programming and fuzzy set theory to generate the results. Stochastic constraints are converted into deterministic constraints using chance-constrained programming. Decision variables in the bi-level VSP are partitioned between the two levels and considered as controlling factors. Membership functions based on fuzzy set theory are created for the goals and controlling factors and are used to obtain the overall satisfactory solutions. The model is tested on a real-life case study of a textile industry and different scenarios are constructed based on the choice of leader’s controlling factors.

Findings

Results showed that the approach is quite helpful as it generates efficient results producing a good level of satisfaction for the decision makers of both the levels. Results showed that on choosing the vendors that are associated with worst values in terms of associated costs, vendor ratings and quota flexibilities as controlling factors by the leaders, the level of satisfaction achieved is highest. The level of satisfaction of solution is lowest for the scenario when the leader chooses to control the decision variables associated with vendors that are profiled with minimum vendor ratings. Results also showed that higher availability of materials and budget with vendors proved helpful in obtaining quota allocations. Different scenarios generate different results along with different values of satisfaction degrees and objective values which shows the flexible feature of the approach based on leader’s choice of controlling factors. Numerical results showed that the leader’s control can be effectively incorporated maintaining satisfaction levels of the followers under various scenarios or conditions.

Research limitations/implications

The paper makes a certain contribution toward the study of vendor selection existing in a hierarchical manner under uncertain environment. A wide set of data of different factors is needed which can be seen as a limitation when the available time is short for the supplier selection process.

Practical implications

VSP which is generally adopted by most of the large organizations is characterized with hierarchical decision making. Moreover, dealing with the real-life concern, the data available for some of the parameters are not complete, representing an uncertainty of parameters. This study is quite helpful for decentralized VSP under uncertain environment to reduce the costs, improve profit margins and to create long-term relationships with selected vendors. The proposed model also provides an avenue to explore the decision making when the leader has control over some of the decision variables.

Originality/value

Reviewing the literature available, this is the first attempt to present a multi-objective VSP where the decision makers are at hierarchical levels considering uncertain parameters such as demand and supply as per the best knowledge of authors. This research further provides an approach to construct scenarios or different cases based on the choice of leader’s choice of controlling factors.

Article
Publication date: 3 April 2018

Remica Aggarwal, Surya Prakash Singh and P.K. Kapur

In this paper, vendor selection and order allocation problem is considered for a buyer dealing in multiple products to be supplied by multiple vendors. Each product has an…

Abstract

Purpose

In this paper, vendor selection and order allocation problem is considered for a buyer dealing in multiple products to be supplied by multiple vendors. Each product has an associated lead time with stochastic demand having stochastic capacity for each vendor across entire time period. Uncertainties related to costs which are further influenced by the periodically changing incremental quantity discounts offered by various vendors. The purpose of this paper is to find an optimal trade-off of vendor selection and order allocation in the presence of uncertainties involving multiple conflicting objectives such as cost minimization, service level/quality level maximization and delivery lead time minimization concurrently.

Design/methodology/approach

Vendor selection problem considered here has a multi-objective optimization design subject to a set of demand, capacity and quantity discount based constraints. These constraints as well as uncertainty related to lead time have been handled using chance constraint approach. The problem is titled as “integrated dynamic vendor selection problem (IDVSP).” The proposed multi-objective IDVSP is solved using both non-pre-emptive goal programming (GP) and weighted sum aggregate objective function (AOF) technique.

Findings

Findings indicate goal achievement for different objectives from both non-pre-emptive GP and AOF procedure. While the goals are satisfactorily achieved as per the target values for cost and lead time, quality/service level was somewhat compromised in order to find an appropriate trade off.

Originality/value

The research work is original as it integrates dynamic as well as stochastic (uncertain) nature of supply chain simultaneously coupled with the concept of incremental quantity discounts on lot sizes.

Details

Benchmarking: An International Journal, vol. 25 no. 3
Type: Research Article
ISSN: 1463-5771

Keywords

Article
Publication date: 5 December 2018

Ahmed Mohammed, Irina Harris and Abdulsalam Dukyil

Vendor selection is the main activity in a sourcing decision, which is a strategic decision in that it leads enterprises to eliminate costs and improve their performance. However…

Abstract

Purpose

Vendor selection is the main activity in a sourcing decision, which is a strategic decision in that it leads enterprises to eliminate costs and improve their performance. However, an inappropriate selection may compromise the financial and operational status of the enterprise. But vendor selection is a complex, multi-criteria decision-making process because different and conflicting criteria have to be considered and assessed in order to find consistent suppliers. Consequently, evaluating and selecting the best vendor is the key to successful business. Traditionally, vendors are normally selected on the basis of traditional criteria (TC), such as costs and quality, neglecting resilience criteria (RC) (e.g. agility and flexibility). Thus, enterprises ultimately realize that a selecting method which involves TC as the only ones is inefficient and needs to be changed. The paper aims to discuss this issue.

Design/methodology/approach

This study was set in motion by a problem in practice. It aims to provide a user-friendly decision-making tool for selecting the best vendor from a group which submitted their tenders for implementing a proposed radio frequency identification (RFID)-based passport tracking system (Dukyil et al., 2017). The main traditional and resilience (“trasilience” henceforth) selection criteria were identified in a unified framework in collaboration with experts in the institution. Next, the Decision-Making Trial and Evaluation Laboratory (DEMATEL) algorithm was used to determine the relative importance of each criterion and the weights thus obtained were integrated into the ELimination Et Choix Traduisant la REalité (ELECTRE) algorithm. The Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) algorithm was also applied, to evaluate the performance of vendors and to select the best one. The qualitative evaluation of the criteria and the vendors was based on four decision makers. Finally, the Spearman’s rank correlation coefficient (SRCC) approach was applied to obtain the statistical difference between the ranking orders obtained from the two algorithms.

Findings

The efficiency of the proposed decision-making tool was evident from the real-case study of six tenders submitted for implementing a RFID-based passport tracking system. The SRCC also turned out a “very strong” association value between TOPSIS and ELECTRE.

Practical implications

The developed trasilient decision-making tool can easily be used to solve similar vendor or supplier selection problem. Moreover, other criteria can be added to fit other cases. Later, the tool was made available to the institution under study for solving future evaluation problems.

Originality/value

The literature shows that none of the previous papers presented an integrated trasilient approach that considers RC and TC simultaneously. This study presents a new trasilience tool for selecting a vendor.

Details

Management Decision, vol. 57 no. 2
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 25 October 2011

Saroj Koul and Rakesh Verma

In the ever‐changing world, vendor selection and evaluation are very important in supply chain management. Recently, there has been extensive research in the areas of vendor

1598

Abstract

Purpose

In the ever‐changing world, vendor selection and evaluation are very important in supply chain management. Recently, there has been extensive research in the areas of vendor selection and evaluation under certainty/uncertainty without time axis, but there has been very little research in the selection of vendor with time axis. The purpose of this paper is to address this gap in the research.

Design/methodology/approach

Traditional approaches have been neglecting multi‐period planning horizon for vendor selection, and many decision makers or experts select vendors based on their practice and intuition. To overcome these problems, a dynamic model supporting vendors with time axis has been developed which is not always crisp, rather it involves a high degree of fuzziness and uncertainty. The authors use fuzzy analytic hierarchy process (AHP) to propose the decision model.

Findings

The research provides a mathematical system that captures the uncertainties associated with human cognitive processes in order to select the vendor. The findings of this study provide meaningful and advanced knowledge to decision makers by demonstrating a simple, efficient method to enhance the ability to predict an appropriate vendor period wise.

Originality/value

This research provides detailed step‐by‐step procedures to choose the best vendor selection and evaluation under uncertainty with time axis in a supply chain. It will be of value to other researchers and the department members in any firm who are responsible for selecting the vendor.

Details

Journal of Manufacturing Technology Management, vol. 22 no. 8
Type: Research Article
ISSN: 1741-038X

Keywords

Article
Publication date: 8 May 2017

Abhijeet Haldar, Umer Qamaruddin, Rakesh Raut, Sachin Kamble, Manoj Govind Kharat and Sheetal Jaisingh Kamble

The purpose of this paper is to propose a framework for evaluating and selecting the most optimal third-party logistics (3PL) service provider vendor among the available ones…

1141

Abstract

Purpose

The purpose of this paper is to propose a framework for evaluating and selecting the most optimal third-party logistics (3PL) service provider vendor among the available ones. Selection is done based on the performance values of the vendors on certain predefined criteria.

Design/methodology/approach

An integrated approach involving data envelopment analysis (DEA), technique for order of preference by similarity to ideal solution (TOPSIS) and linear programming (LP) problem has been used to develop a new model for the selection of 3PL vendor. First, DEA is used to evaluate the efficiency of each vendor according to the identified criteria. Second, TOPSIS is applied to rank the maximally efficient vendors. Finally, LP problem is stated and solved to ascertain the quantities to be allocated to each maximally efficient vendor in the context of multiple logistics provider. The proposed DEA–TOPSIS–LP (DETOLP) model is finally tested with real-time industry data for 3PL vendor evaluation and selection. The study, thus, proposes a three-step hierarchical technique for selection of 3PL vendor based on the multiple criteria decision-making approach.

Findings

The paper focuses on assessing the performance of 26 vendors using a combined approach of DEA, TOPSIS and LP. It is observed that vendor V4 outperforms all the considered vendors, which exactly corroborates with the present scenario within the company.

Research limitations/implications

Exclusion of qualitative criteria for 3PL vendor selection and the judgment of weights for TOPSIS can be considered as the limitations of the present work. The study has significant practical implications for organizations belonging to any sector or industry. It can help them in evaluating the existing 3PL vendors and selecting the most efficient among them.

Originality/value

This paper deals with a framework modeled for 3PL vendor selection. It is the first attempt to utilize an integrated approach, i.e. DETOLP model for evaluation and selection of 3PL. For assessment of the model, real data from an Indian company has been taken to analyze the result and compare it with the present scenario within the company.

Details

Journal of Modelling in Management, vol. 12 no. 2
Type: Research Article
ISSN: 1746-5664

Keywords

Article
Publication date: 14 July 2021

Mohammad Akhtar and Md Tanweer Ahmad

This paper aims to select key criteria for sustainable vendor assessment and spare-parts supplies in the Indian petroleum refining sector using stochastic fuzzy technique for…

Abstract

Purpose

This paper aims to select key criteria for sustainable vendor assessment and spare-parts supplies in the Indian petroleum refining sector using stochastic fuzzy technique for order of preference by similarity to ideal solution (SFTOPSIS).

Design/methodology/approach

The criteria for sustainable vendor evaluation and selection are identified from the review of the literature and further; it is finalized using the Delphi method. Eight supply chain (SC) experts from the Indian petro refining sector were identified as having more than five years of experience and agreed to participate in this study (known as decision-makers (DM)). Five vendors supplying spare-parts are shortlisted from the market with the discussion and consent of procurement experts from petroleum refineries. Subsequently, criteria and vendors are rated based on relative importance in linguistic terms from the group of eight DMs. As ratings involve uncertainties in the decision-making, the SFTOPSIS method is applied to determine criteria weight and vendor ranking at a distinct significance level (α). The ranking of the vendors is obtained for sustainable supply of spare-parts in the Indian petro refining sector using the SFTOPSIS method.

Findings

The ranking of sustainable vendors is obtained through the integrated application of the fuzzy and stochastic approach to capture the uncertainties in the ratings of DMs. The sensitivity analysis is carried out at distinct confidence limits of a normal distribution to obtain a robust ranking of the vendors. In this paper, a case application of SFTOPSIS in the Indian petro refining sector is presented in which key criteria and the vendor ranking are found to be changing with confidence limit for sustainable vendor evaluation.

Practical implications

The fuzziness and randomness in relative ratings collects from a group of DMs are taken in the proposed methodology. The distinct approaches are compared with changing significance-level under stochastic, fuzzy and deterministic TOPSIS to acquire robustness in the ranking. The proposed SFTOPSIS model can be useful to practitioners from the petroleum sector.

Originality/value

The originality of the paper contributes to an application of the SFTOPSIS method that is the extension of FTOPSIS in the petro refining sector of a developing country. The sensitivity analysis with distinct significance-level shows the uncertainties in the collected ratings from the DMs that supports robustness in the ranking. It might be helpful for SC professionals from the petro refining sector, who assess the rank of the vendors at different confidence limits for sustainable supply of spare-parts. Further research in the petroleum industry from emerging economies needs to be undertaken to broaden its scope and applicability.

Details

Benchmarking: An International Journal, vol. 29 no. 3
Type: Research Article
ISSN: 1463-5771

Keywords

Article
Publication date: 10 April 2009

Qian Li

The purpose of this paper is to help enterprises to define and refresh their specific vendor selection criteria according to changing situations.

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Abstract

Purpose

The purpose of this paper is to help enterprises to define and refresh their specific vendor selection criteria according to changing situations.

Design/methodology/approach

This paper firstly analyzes the variety of vendor selection criteria according to the diverse business environment. Furthermore, an approach of vendor selection based on MW‐OBS (an artificial neural network pruning algorithm) is put forward. MW‐OBS contributes a lot in distinguishing the crucial items of selection criteria based on certain enterprise's operational data, instead of assuming the criteria set subjectively. Meanwhile MW‐OBS evaluates the importance weights of these crucial items in criteria by data training.

Findings

The vendor selection criteria is believed to change for diverse enterprises and even for an enterprise's mutative business conditions because of the attribute of materials, cooperation relationships, and supplier's performance. The approach establishes the vendor selection criteria for different enterprises based on their own conditions, and once business environment changes, with new data being generated, the set can be refreshed dynamically and timely.

Research limitations/implications

This approach extends the research of neural network pruning algorithm, for example the importance of all reserved criteria can be achieved from trained network without extra optimization,

Originality/value

This approach put emphasis on distinguishing dynamic criteria consistent with enterprise's circumstance. Enterprises are capable of constructing their various criteria collections conveniently according to their own specific situations with the application of approach.

Details

Kybernetes, vol. 38 no. 3/4
Type: Research Article
ISSN: 0368-492X

Keywords

Article
Publication date: 28 August 2009

Reza Farzipoor Saen

The purpose of this paper is to propose a straightforward model for selecting slightly non‐homogeneous vendors.

349

Abstract

Purpose

The purpose of this paper is to propose a straightforward model for selecting slightly non‐homogeneous vendors.

Design/methodology/approach

In this paper the use of the interval data envelopment analysis (DEA) is suggested. The bounds of intervals are constant and can be obtained by various estimation techniques. The interval DEA model provides for the decision making units (DMUs) with missing values a lower and an upper bound of their efficiency score corresponding to their most favorable and unfavorable option.

Findings

Employing the proposed method for selecting slightly non‐homogeneous vendors largely reduced practical difficulties for vendor selection. This method does not exclude any vendor from the selection problem. For all the vendors it provides bounds of the efficiency scores depended on the particular data values that the vendors with missing data assign within the intervals so to maximize their efficiency score.

Practical implications

The proposed model considers a slightly non‐homogeneous situation for vendor selection. The proposed approach is driven by multiple criteria. The joint consideration of multiple criteria in a slightly non‐homogeneous environment helps managers select vendors using a comprehensive approach that goes beyond just purchase costs.

Originality/value

This paper is believed to be the first to discuss the problem of slightly non‐homogeneous vendor selection with respect to interval mathematics.

Details

Journal of Advances in Management Research, vol. 6 no. 2
Type: Research Article
ISSN: 0972-7981

Keywords

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