International Journal of Procurement Management (22 papers in press)
Preserve the Relative Efficiency Values: An Inverse Data Envelopment Analysis with Imprecise Data
by Mojtaba Ghiyasi, Sahar Khoshfetrat
Abstract: Data Envelopment Analysis (DEA) measures the relative efficiency of a set of Decision Making Units (DMUs) according to the available input-output data. With the advent of DEA models, Inverse DEA is applied to modify the inputs and outputs of DMUs without affecting their efficiency. Inverse DEA models are applied when the decision makers need to change the input-outputs of the DMUs to a certain level without affecting their efficiency. In fact, Inverse DEA models are extended when the input-output data are imprecise and available in the intervals form. However, with regard to uncertainty, complete information about the input-output data is not available in many real world applications. To address this problem, this study deals with the Inverse DEA problem in an uncertain environment. Therefore, two Multi-Objective Linear Programming (MOLP) models are proposed to estimate the required upper/lower inputs, producing requested outputs and preserving the efficiency scores. Proposed models preserve the upper/lower efficiency scores of all considered DMUs. A numerical example is provided to illustrate the proposed methodology of this study. According to the results, it is shown that proposed models provide better results in terms of required upper/lower inputs.
Keywords: Inverse DEA; Imprecise data; Interval data; MOLP.
Contingent variables to the price charged by hotels
by Maria João Machado
Abstract: This study has two specific objectives: to analyse the association between the hotel features and the price practiced; to analyse whether the performance evaluation tools used are associated with the price charged by the hotels. Data collection began with a survey directed at the financial managers of 4 and 5 star hotels located in Portugal to collect information on the performance evaluation tools used, and on some hotel features. I obtained 241 completed questionnaires, and to meet the objectives proposed, I also collected the price charged by the responding hotels, using the online platform Booking.com. The results obtained help us to fill a knowledge gap identified in the literature review regarding the influence of the hotels operating conditions on the price practiced, since it leads to the conclusion that hotel features and the performance evaluation tools used influence the price practiced.
Keywords: hotel price; performance evaluation tools; Balanced Scorecard; Tableau de Bord; hotel features; hotel industry; contingent variables.
A Mixed Integer Linear Programming Model for Dynamic Supplier and Carrier Selection Problems
by Purnawan Adi Wicaksono, I. Nyoman Pujawan, Erwin Widodo
Abstract: The dynamic supplier selection problem (DSSP), which occurs when no supplier can fulfil the buyers total demand due to various limitations, has received attention from academics. However, to the best of our knowledge, there is no publication that addresses the DSSP and carrier selection simultaneously. Given that products are sourced from different suppliers, the choice of carrier is important in order to satisfy demand at the minimum total cost. In this paper we present a model that integrates the DSSP and carrier selection under uncertain delivery performance; that is, a portion of orders are not delivered on time and a portion of delivered goods are imperfect and hence are rejected by the buyer. We propose a mixed integer liner programming (MILP) model and apply it to a case where a buyer is sourcing multiple items from multiple suppliers and the decision has to be made on a multi-period planning horizon. A numerical example has been tested to show the effectiveness of the model. We assume that backlogging is allowed and the effect of demand fluctuation is analysed.
Keywords: dynamic supplier selection; carrier selection; mixed integer linear programming; delivery performance.
Purchasing Inventory Models for Exponential Demand with Deteriorating items and Discounted Cost in Third Order Equation
by Sivashankari C.K.
Abstract: The purpose of this article is to present a solution procedure for the inventory problem of deteriorating items and Exponential demand taking account of time value of money. Also, most of the works on inventory models do not take the optimal solution in higher order equation. In this paper, inventory models for deterioration items with time dependent exponential demand under inflation and the optimum solution is derived in higher order equations. Two models are developed and the optimum time and total cost are derived (i) when the demand is exponential with deterioration items, (ii) demand is exponential with deterioration items and discounted cost. Mathematical models are developed for each model and the optimum time and optimal lot size which minimizes the total cost is derived. Numerical examples are given to illustrate the theoretical results and made the sensitivity analysis of parameters on the optimal solutions. The validation of result, this model was coded in Microsoft Visual Basic 6.0
Keywords: Inventory; Deteriorating; Exponential Demand; Discounted cost and Third order equation.
An Organisational Approach to Sustainable Public Procurement
by Ridzuan Kushairi M.R.
Abstract: A systematic review of the literature on public procurement found that social and environment objectives were adopted in economic development over the last three decades. The need to incorporate social and environmental objectives in economic development was found to be an ethical approach in governance. The adoption was aimed at addressing socio-economic justice and environmental protection in economic development. Studies found that the sustainable adoption objectives by the public sector lacked progress. This was due to varied objectives adopted in public procurement and the inefficiency of the adoption process. The factors that affect the sustainable agenda were institutional and stakeholder factors. An interview process was undertaken of the federal agencies public procurement system to investigate the institutional and stakeholder factors of the public sector in adopting social and environmental objectives in public procurement. The investigation was approached from the perspective of the organisation as a multi-structure system involving hierarchies, people, and the system of administration and governance. This study found that collaboration among stakeholders in the organisation structure played an important role in enhancing the adoption of social and environmental objectives in public procurement by adopting different types of knowledge within a bounded and complex multi structure system of the organisation. This provided contributions to the practitioners and policy makers a basis for designing public procurement policies and regulations.
Keywords: Sustainable Public Procurement; Organisation Structure; Public Procurement.
The Power of Public Procurement: Social Equity and Sustainability as Externalities and as Deliberate Policy Tools
by Mohamad Alkadry
Abstract: Cities in the United States are facing the impacts of climate change and socio-economic disparities on a daily basis. This article emphasises the increasing importance of adoption of sustainability policies at the local government level. This premise is based on Everett Rogers Diffusions of Innovations theory, which indicates that organisations can be trendsetters in their policy decisions. Local governments are increasingly becoming trendsetters in leading other public and even private organisations on sustainability efforts in general, and in sustainable procurement in particular. The research on what drives a local government's involvement in sustainable procurement is scarce. This study analyses survey responses from 207 U.S. regional and local governments who are member agencies of the National Institute of Government Purchasing (NIGP). A model analysing organisational, regional socio-economic, and regional demographic variables was created and tested. Results demonstrate that political leanings, degree of professionalisation, and access to decision makers are the most significant predictors of variance in adoption of sustainable procurement practices. We conclude that ethical spending of public dollars to achieve sustainable outcomes (i.e. sustainable procurement) is more likely to be influenced by the political leanings of the population than by the capacity of the local government to institute and enforce sustainable practices.
Keywords: sustainability; sustainable public procurement; local government.
Inventory Model for Deteriorating Items with Price and Time Dependent Seasonal Demand
by Pratibha Sharma, Ashish Sharma, Sanjay Jain
Abstract: Deteriorating items are considered as the main source of revenue. Many deteriorating items pusses the seasonal demand pattern. Generally, the sellers made a bulk purchase during the season and used the replenished inventory over a number of successive demand seasons. Thus, the inventory models for deteriorating item with a seasonal demand will provide valuable managerial insights. We developed a deterministic inventory model with price and time-dependent seasonal demand rate for items undergoing constant deterioration. Replenished inventory is used for more than one successive seasons and after depletion, at the end of the season order is placed for next replenishment. Shortages are considered only for one season. Time-dependent partial backlogging is considered for shortages. Analytical results for the optimality of the profit function with respect to decision variables in closed-form expressions are presented. Solution procedure and analytical results are verified with a numerical example.
Keywords: Inventory; Deterioration; Seasonal demand; Time and price dependent demand; Backlogging.
Contracting for Public Stewardship in Public-Private Partnerships
by Joshua Steinfeld, Kouliga Koala, Ron Carlee
Abstract: Public-private partnerships (PPPs) are potentially solutions to some governmental challenges but the differing motives of the private and public sectors pose issues regarding accountability. Through a public stewardship framework, a prescriptive analysis is presented to demonstrate how both value-for-money (VFM) and the pursuit of public values can be simultaneously achieved in benefitting both sectors. Best value, leadership, and collaboration emerge as outcome variables of public stewardship that serve to improve accountability for PPPs. The findings reveal public stewardship as the critical link between VFM and public values to reconcile accountability issues that have been identified as obstacles to the successful formation and implementation of PPPs.
Keywords: Public private-partnerships; Public stewardship; Value for money; Accountability; Public values; Public management; Best value; Leadership; Collaboration; Competing Motives.
Sustainability of supply chains case study of textile industry in the Republic of Serbia
by Aleksandra Andelkovic, Marija Radosavljevic
Abstract: Concerning the fact that the concept of supply chain sustainability draws attention of increasing number of authors, on one hand, and the confirmation of its usefulness in modern condition, on the other hand, make this field of business management very interesting research area. This is especially important for the supply chains in the developing countries, since this concept increases their chances for the successful involvement into the global flows. Textile industry has been chosen for the assessment of the level of supply chain sustainability concept presence due to the fact that the aspects of sustainability are obvious and recognized by the customers of this industrys products, so companies from the textile industry are, in a way, obligated to be sustainable. The analysis of the data collected within a textile industry cluster is based on certain statistical methods, such as description statistics, analysis of variance, factor analysis, cluster analysis, and regression analysis.
According to the results of empirical research authors claim that in supply chain in textile industry, in the Republic of Serbia, there is low level of supply chain greenness, on one hand, but relatively high level of implementation of supply chain sustainability concept. The authors suggested which variables of sustainability should be improved in provide more balanced implementation of sustainability concept.
Keywords: supply chain; sustainability; green supply chain; textile industry.
Determining Reasonable Bid Ratios under Two-Sided Power Distribution Assumption for Public Procurement under Capped Lowest-Cost Bidding System
by Andreas Wibowo
Abstract: This paper proposes a new definition of reasonable bid ratiosa ratio of bid price to published owner cost estimateunder the capped lowest-cost bidding system and provides a closed-form solution to determine the ratios for a given number of bidders. Bid ratios are assumed to be random, obeying two-sided power distribution (TSP). A reasonable bid ratio is found to decrease with increased number of bidders. The Monte Carlo simulations demonstrate that the computed reasonable bid ratios under the assumption of TSP distribution are proven to be very close to those under beta distribution and those from empirical data and are more accurate than those estimated from triangular distribution. Using Indonesian public procurement as a case study, this paper shows that reasonable bid ratios with uncertain numbers of bidders are lower than the traditional cut-off point. To make the proposed model operational, this paper also presents a simple protocol including the determination of minimum sample size required for TSP approximation. This paper concludes with model limitations and directions for future research.
Keywords: reasonable bid ratio; first-order statistics; two-sided power distribution; capped bidding; Indonesia.
THE EFFECT OF INDEPENDENT COMMISSIONERS, MANAGERIAL OWNERSHIP, AND AUDIT COMMITTEE ON ACCOUNTING CONSERVATISM
by Einde Evana, Edwin Mirfazli, Adriana Tiron Tudor
Abstract: This study aims to examine the influence of independent commissioner, managerial ownership, and audit committee on the accounting conservatism. The accounting conservatism is measured by accrual measurement. The population of this study is manufacturings companies listed on Indonesia Stock Exchange in 2012-2015. Based on purposive sampling method, the total obtained sample is 508 companies.
The source of data is taken from annual reports of companies listed on Indonesia Stock Exchange in 2012-2015. The data analysis method is using multiple linear regressions with SPSS 22 software application.The result of this study found that managerial ownership has significant negative effect on the accounting conservatism, while the variables of independent commissioner and audit committee have no significant effect on the accounting conservatism.
Keywords: Keywords : Accounting conservatism; accrual measurement; corporate governance; independent commissioner; managerial ownership; and audit committee.
Irans energy policy after the nuclear deal for cooperation with foreign oil & gas companies
by Moslem Alimohammadlou, Abbas Bonyani
Abstract: The exceptional opportunities provided in the Iranian Petroleum industry, has attracted the attention of international oil/gas companies. Ever since the sanctions on economic and financial cooperation with Iran have been lifted, major oil companies have expressed their interest in cooperating with Iran in its oil/gas fields. This study sought to propose a model for evaluating and ranking foreign oil/gas companies willing to participate in the Irans energy sector. To accomplish this, an integrated model composed of Best-Worst Method and VIKOR was used. More specifically, to weight the criteria best-worst method, and to evaluate and finally rank the alternatives, VIKOR was used. The data were collected through questionnaires which gathered the opinions of 8 experts in the field of Iranian oil/gas industry. Data analysis revealed that a number of American companies, along with some leading European companies, had higher ranks, compared to the others and those which cooperated with Iran during the sanctions.
Keywords: Iran; energy sector; post-sanctions; Best-Worst Method; VIKOR.
Positive and Negative Impacts of the Adoption of e-Procurement Solutions: the Italian Market Case
by Sara Belisari, Andrea Appolloni, Corrado Cerruti
Abstract: This paper aims to define the positive and negative impacts of the adoption of e-Procurement solutions both in the private and public sectors of the Italian market. The cases of two leading Italian companies in e-Procurement solutions have been analysed as these two companies have developed more than 150 e-Procurement projects and effectively represent the situation in the Italian market. This study fulfils the need for solid empirical findings on this very important topic within the Italian market where the adoption of e-Procurement solutions is still at an early stage and guidance is still needed on how this solution can impact on firm performance.
Keywords: positive impacts; negative impacts; e-procurement; Italian market.
Supplier selection and evaluation in military supply chain and Order allocation
by Ali Nazeri, Rahman Soofifard, Gholam Reza Asili
Abstract: The history of military activities known as logistics and supply chain goes back to the history of the wars. The military supply chain management (MSCM) involves coordinating the production, inventory and transportation between the elements of a supply chain, to provide the best combination of response and efficiency for the base that feeds it. In fact, must operate with mutual understanding of military issues such as strategy, tactics, military intelligence, training, human resources and financial support, because the military's focus is more in response to operational requirements. Usually, supplier performance are assessing based on several indicators in supply chain management. In this paper, a multi-purpose mathematical programming model has proposed to determine the quality, quantity and risk factors of the best suppliers in the military supply chain and give them the optimum order quantity. Using the analytical hierarchy process (AHP), a preliminary review of these suppliers and multi-purpose modeling takes place. The designed model is solved with the multi objective particle swarm optimization algorithm (MOPSO) and the best answer is determined after ranking the Pareto Response set from the TOPSIS (method for order of preference by similarity to ideal solution). The efficiency of this model has tested by sensitivity analysis on the weight factors of the indicators and the risk of supply and the results of the tests show that this model has high efficiency. The tested model can also used in other supply chains for the integrity of the military supply chain.
Keywords: Supplier selection and evaluation; Order allocation; Multi-objective programming; Multi-objective particle swarm optimization algorithm.
Validating Trust and Commitment as Mediators between Economic and Non-Economic Satisfaction in Puerto Rican Buyer-Supplier Relationships
by Juan Carlos Sosa Varela, Goran Svensson
Abstract: Purpose To validate a research model established by Ferro et al (2016) in which trust and commitment are mediators between economic and non-economic satisfaction.
Design/Methodology/Approach: The sample for this study comprises a total of 400 small and medium-sized Puerto Ricans enterprises from various industrial sectors. A total of 133 usable questionnaires were returned, generating a response rate of 33.25 percent. A research model consisting of hypothesized relationships between constructs was tested based on a survey of small and medium-sized companies in Puerto Rico. Structural equation modeling using AMOS software was used to analyze the data.
Findings: Trust and commitment are mediators between economic satisfaction and non-economic satisfaction.
Research implications: Valid and reliable theory should be applicable across contexts and through time offering a foundation of the generality of empirical findings.
Managerial implications: Provides managerial support and guidance to assess satisfaction, trust, and commitment in business relationships.
Originality/Value: Offers a foundation of validity and reliability across contexts and through the time of a nomological framework consisting of economic and non-economic satisfaction, trust and commitment.
Keywords: economic; non-economic; satisfaction; trust; commitment; business relationships; SME; Puerto Rico.
OPTIMAL ORDER QUANTITY BY MAXIMIZING EXPECTED UTILITY FOR THE NEWSBOY MODEL
by Mahadev Ota, Srinivasan S, Nandakumar C D
Abstract: The classical newsboy problem deals with profit maximization by choosing the optimal ordering quantity. In contrast to the earlier newsboy type problems, this study assumes that the investor makes the investment decision so as to maximize expected utility instead of expected profit. Accordingly, this paper discusses the newsboy problem, who tries to find the optimal ordering quantity so as to maximize his expected utility at a given level of initial wealth. In addition to this, it is assumed that the newsboy is a risk averse investor and the log utility function is introduced to show the level of utility associated with different levels of wealth, conforming to the assumption of risk aversion. Finally we have developed a method to maximize the expected utility by determining the optimal ordering quantity based on the different levels of investors initial wealth. From the numerical examples, it is clear that the optimal ordering quantity varies depending on investors different levels of initial wealth and the sensitivity analysis demonstrates how an investor can choose the initial wealth and optimal ordering quantity to maximize his expected utility.
Keywords: optimal ordering quantity; expected utility; initial wealth; risk averse; salvage value.
Segmenting Critical Success Factor for Generating Corporate Entrepreneurship Based on Fuzzy DEMATEL and Fuzzy AHP in Iranian Institutes
by Mostafa Kazemi, Maryam Aliei
Abstract: By achieving modern methods, Corporate Entrepreneurship and institutes are constantly trying to search for other solutions to inspire more innovation so that based on their interests and attitudes, they voice their opinion to the superiors of the organization. Numerous researches all indicate that Entrepreneurial Attitude can change the organizations. Therefore, organizations and large companies consider Entrepreneurial Attitude more than before. They are constantly ready to meet customers demands and pull marketing. In this paper, we study the functional factor that initiate corporate organization. In Fuzzy analytic hierarchical process (Fuzzy AHP) and Fuzzy decision making trial and evaluation laboratory (Fuzzy DEMATAL), we ranked critical success factor of the Corporate Entrepreneurship in Iranian Institutes.
Keywords: Fuzzy DEMATEL; Fuzzy AHP; Corporate Entrepreneurship.
A Volume Flexible Two-Warehouse Model with Fluctuating Demand and Holding Cost under Inflation
by Ajay Singh Yadav, Anupam Swami
Abstract: This article develops a two-warehouse inventory model for decaying items under a volume flexible production system. The variable demand rate is taken into consideration. Unit production cost is considered to be dependent on production rate, tool cost and dye cost. The own warehouse is taken of fixed capacity. The objective of this study is to determine the optimal schedule, for this purpose solution procedure is provided. A numerical assessment with sensitivity of different system parameters is also given to illustrate the concept of the model.
Keywords: Inflation; Volume flexibility; Variable demand; Two-warehouse.
MAJOR REASONS FOR RETURNS DURING ONLINE PURCHASE IN MAJOR CITIES OF INDIA.
by Thiyagarajan Gopalakrishnan
Abstract: Due to online penetration, the purchasing pattern of the Indian customers is changing. Purchasing happened through Laptop yesterday becomes Mobile by today. As the volume in online purchase is huge daily the returns also expected in a huge manner. Returns eat away the profits of Online Retailing Industry. Central and State Government restrictions also forcing the online retailers to manage return effectively. So the Organizations are taking measures to understand the reasons of returns by the customer in order to avoid pilferage due to returns. The aim of the study is to find the reasons of returns by the customer and enhance the online buying experience and reducing the returns. The empirical study and analysis will provide reasons for returns by the customer.
Keywords: Logistics; Supply chain management; Reverse Logistics; Forward Logistics; Online retailing; etc.
Gaps in Public Procurement Records Management
by Jemima Ottou, Bernard Baiden, Gabriel Nani
Abstract: The study determined gaps in the records management of the competitive bidding process in public works procurement in Ghana. Best practices based on the Public Procurement Act 663 and Act 914 which are in line with ISO 15489-1 standards were adopted as a benchmark and compared with existing practices. A multiple case study strategy was used to compare the results of literature synthesis on procurement records management with the existing situation in 3 selected public entities to establish a trend. Four main gaps were identified, namely, fragmentation of files; different department keeping the fragmented files; unavailability of certain required records; and difference between process file name and number in comparison with the process name and number in procurement plans. These gaps have reduced process transparency and accountability and have downplayed the integrity of procurement processes fostering corruption.
Keywords: Accountability; Competitive Bidding; Corruption; Public Entities; Public Procurement; Records Management; Transparency.
Identification and Assessment of Compensation Events under Public Procurement Authoritys Conditions of Contract for Medium Contracts: Consultant, Client and Contractors Perspective
by Daniel Donyinah, Emmanuel Nsiah Ankomah, Stephen Agyeman, Daniel Oteng
Abstract: This article which is the first in the compensation events series identified significant compensation events in relation to construction time from the perspective of the consultant, client and contractor. Significant compensation events under cost and profit will be looked at in the subsequent papers. Quantitative research approach was espoused and purposive sampling was used to determine the respondents. Twenty-five identified compensation events were significantly tested and ranked in order of importance using the relative importance index. Inexperience, poor communication and clients with no technical background were identified to be the most significant. Factor analysis carried out indicated that variables had common underlying factors. The significant common factors of compensation events identified after reduction analysis were work interruptions, inconsistent instructions and late implementation. It was also revealed that compensation events tend to drag most construction projects. Hence, their origination must be assessed and solutions implemented for a successful project completion.
Keywords: Compensation events; construction time; relative importance index; factor analysis; tripartite; Public Procurement Act; consultants; contractors; clients; Ghana.
An inventory model for non-instantaneous deteriorating items with variable holding cost under two-storage
by Ajay Singh Yadav, Anupam Swami
Abstract: This paper presents a two warehouse inventory model for non-instantaneous deteriorating items under assumption that the Inventory cost (including holding cost and deterioration cost)in RW (Rented Warehouse) is higher than those in OW (Owned Warehouse) due to better preservation facilities in RW. The demand and holding cost, both are taken variable and as linear increasing function of time. Shortages are allowed in the OW and completely backlogged at the next replenishment cycle .This paper mainly dealt with Non Instantaneous deteriorating items with linear time dependent holding cost and demand where transportation cost from RW to OW has been incurred and is depended upon the amount of goods transported irrespective of time, distance from RW to OW and the capacity of vehicle used for transporting commodities.
Keywords: Two warehouses; Non-instantaneous deterioration; Time-dependent Demand; Variable holding cost and shortages.