International Journal of Procurement Management (41 papers in press)
Purchasing Category Management: Providing Integration between Purchasing and Other Business Functions
by Jussi Heikkila, Riikka Kaipia, Mika Ojala
Abstract: Organising the purchasing and supply management (PSM) function has been changing due to the increasingly strategic role of the function requiring integration with other business functions and the entire supply chain. One solution is to organise PSM into categories - a common practice in todays manufacturing organisations. In this paper we explore how purchasing category management (PCM) affects cross-functional integration. We analysed purchasing category management practices through in-depth case-studies in four manufacturing firms in two types of industry. Our research contributes to the purchasing and supply management research in two ways. First, it addresses the role of purchasing category management in organising PSM in large manufacturing companies. Second, it elaborates on purchasing categories providing integration between purchasing and other business functions, suggesting how different mechanisms are needed for different contexts.
Keywords: purchasing; procurement; supply management; purchasing category; category management; purchasing category management; organisation; integration; organisational integration; cross-functional integration; case research.
A partial backlogging production-inventory lot-size model with time-varying holding cost and weibull deterioration
by Ajay Singh Yadav, Anupam Swami
Abstract: This paper presents an economic production model with time varying holding cost. The demand and backlogging rates are assumed to be continuous and varying with time. While the production rate is assumed to be stock dependent with unknown time horizon. Shortages are allowed with partial backlogging of demand. Deterioration is taken into consideration and the deterioration rate follows the weibull distribution pattern. The models generate optimal values of initial production run time, onset of shortages, and production recommencement time that minimizes the total relevant costs of production and inventory for any given set of system parameters. A numerical example and sensitivity analysis are given to validate the proposed models.
Keywords: Production; partial backlogging; inventory; variable holding cost; non instantaneous deterioration.
Inventory decisions in a closed-loop supply chain system with learning and rework
by Wakhid Ahmad Jauhari, Oktiviandri Hendaryani, Nughthoh Arfawi Kurdhi
Abstract: In this study, we investigate a closed-loop supply chain model consisting of a manufacturer and a retailer. The retailer orders items from the manufacturer to satisfy end customers demand. The manufacturer uses both regular production and remanufacturing processes to produce items to satisfy the demand from the retailer. The returned items are collected and screened by the manufacturer for recovering process. We consider learning process in both regular production and remanufacturing processes. In addition, the imperfect items produced during regular production are reworked. The model contributes to the current literature by allowing the inclusion of learning process in regular production and remanufacturing processes, imperfect items, rework and multiple cycle policy. Our objective is to optimize the percentage of used item purchasing price per raw material cost, retailer ordering cycle, number of regular production cycles and the number of remanufacturing cycles, so that the joint expected total annual profit incurred has the minimum value. Furthermore, an algorithm is proposed to find the optimal solutions of the proposed model. We also provide a numerical example and conduct a sensitivity analysis to illustrate the models behaviour and feasibility.
Keywords: closed-loop supply chain; reverse logistic; learning; rework; defective item; remanufacturing.
Supply Chain Coordination Voyage towards Supplier Relationship Management: A Critical Review
by Aishwarya Dash, Ranjit Das, Sushant Tripathy
Abstract: Supply Chain Coordination bridges gap between the point of origin and point of consumption in the supply chain network of companies that is from suppliers to end users to manage their dependence on each other. Now-a-days the Manufacturing organizations are using the power of Supplier Relationship for their survival in a high volatile market Place. This Research is focused on hundreds of past research work in the areas of coordination and their findings have been grouped under three categories like factors affecting Supplier Relationship Management (SRM), methodologies used to measure the performance of SRM & trends of SRM. The findings of this exploratory paper is to uncover the meaningful key factors, appropriate methodology used to measure the performance, and focused dynamic trends of supplier relationship management of manufacturing organisation in twenty fast centuries. Our study will be a guideline for supply chain managers to develop a strong covalent bonding with suppliers in present scenario.
Keywords: Supply chain coordination; Supplier Relationship; Performance Measurement Methodology.
e-Tendering Readiness in Construction: An A Priori Model
by Moath Alyahya, Martin Skitmore, Adrian Bridge, Madhav Nepal, David Cattell
Abstract: Electronic tendering (e-Tendering) is moving the construction procurement industry to more professional practice. Nowadays, many organisations have not made the move to e-Tendering or they dont practice e-Tendering fully. However, the growing use of e-Tendering requires organisations to have a minimum of electronic readiness (e-Readiness). In this paper, the need for an e-Tendering model in construction is demonstrated. Additionally, a conceptual e-Tendering Readiness Model (e-TRM) is developed to describe the status of an organisation readiness to adopt e-Tendering. This involves a review of previous e-Tendering models, the importance of e-Tendering models for the construction industry and the requirements for developing e-TRM. The e-TRM is then proposed to assess an organisation readiness prior to e-Tendering implementation. This involves five themes of People, Process, Work Environment, Technology and Service Providers. These five themes consist of 13 constructs representing the basic items of the e-TRM. The Service Providers theme is proposed for the first time as a necessary support for successful e-Tendering implementation. Finally, some suggestions are made for future work to empirically test the e-TRM.
Keywords: e-Tendering; e-procurement.
An Inventory model for Deteriorating Items with Expiry Date and Time Varying Holding Cost
by Seema Sharma, Sanjay Singh, S.R. Singh
Abstract: In this paper, an economic order quantity model for items which deteriorate and expire with time has been developed. The holding cost has been assumed to be a linear function of time, whereas demand has been considered as a function of expiry date and selling price. Shortages are allowed and partially backlogged. The model so developed has been discussed for two cases of partial backlogging (i) backlogging rate is taken to be constant and (ii) backlogging rate depends upon waiting time. A numerical example given here illustrates each case. Finally, sensitivity analysis is carried out to analyze the behavior of the model.
Keywords: Deterioration; Expiry items; Holding Cost; Partial Backlogging.
Analysing Contractor Prequalification Criteria in Construction: New Insights through Interpretive Structural Modeling
by ASHISH GOEL
Abstract: Previous research has established the importance of selecting suitable prequalification criteria to shortlist competent contractors and the role of these criteria in project success. However, very few studies have dealt with establishing hierarchy and investigating interrelationship among prequalification criteria. The rationale of this research is to unearth this seemingly unapparent relationship among these criteria through Interpretive Structural Modeling (ISM). The analysis reveals that financial capability and past performance of contractor, two of most commonly used criteria for contractor prequalification, are inadequate for competent contractor short-listing due to their strong dependence on other criteria. Based on the hierarchy developed in the model, it is suggested that criteria like environmental policy, litigation/blacklisting history and bid capacity of the contractor should be given higher importance by the clients. The findings may improve the prequalification process by assisting the clients in making informed decision regarding selection of prequalification criteria based on the hierarchy and classification established in the model.
Keywords: Prequalification Criteria; Contractor selection; Construction; Interpretive Structural Modeling (ISM); MICMAC.
INTEGRATED SUPPLY CHAIN MODEL FOR DETERIORATING ITEMS WITH LINEAR STOCK DEPENDENT DEMAND UNDER IMPRECISE AND INFLATIONARY ENVIRONMENT
by Ajay Singh Yadav, Anupam Swami
Abstract: In this paper, we develop an integrated supply chain model for deteriorating item, with linear stock dependent demand, taking into account the views of both the vendor and the multi-buyer under imprecise and inflationary environment. We have used the implicit cost in this model and use function principle to calculate the fuzzy total supply chain cost and Graded Mean Integration Representation Method is used to defuzzify the fuzzy total supply chain costs.
Keywords: integrated supply chain model; deteriorating item; linear stock dependent demand; inflationary environment; graded mean integration representation method.
Solving the problem of industry by formulating it as a capacitated transportation problem
by Kavita Gupta
Abstract: This paper presents the solution to the problem of the manager of a trading firm, D.M Chemicals, who deals in the trade of marble powder. The problem of the manager is to determine the quantity (in tons) of marble powder that the firm should purchase from different sellers and sell to the different buyers such that the total cartage and relative purchasing cost is minimized provided the demand and supply conditions are satisfied and the extra demand is also met during emergency situations. The problem under consideration is modeled as a linear plus linear fractional capacitated transportation problem with enhanced flow. The data is taken from the account keeping books of the firm. The solution so obtained by using the developed algorithm is compared with the existing data. Moreover, the solution obtained is verified by a computing software Excel Solver.
Keywords: capacitated; transportation problem; optimal solution; feasible solution; enhanced flow,related transportation problem; corner feasible solution.
Analyzing the European Unions Tenders Electronic Daily: Possibilities and Pitfalls
by Eric Prier, Palina Prysmakova, Clifford McCue
Abstract: As a public policy tool, the open data movement holds out hope of large payoffs in democratic accountability. This paper explores the efficacy of the Tenders Electronic Daily or TED open dataset which covers 33 European countries operating at numerous levels of government. While the recent move toward making the TED open data available in a potentially more user-friendly manner could have been a milestone in realizing a major aspect of the goals of the open data movement, this study demonstrates through numerous procurement examples that the structure of the individual files that comprise this complex dataset is extremely difficult to understand inrnits current form. Moreover, the transparency that may have resulted from this initiative is unlikely to efficiently serve the purposes of public procurement accountability. As a result, the TED open data in its current form should be approached with an abundance of caution.
Keywords: public purchase; e-government; transparency; large-scale dataset; contract award; contract notice.
A framework for buyer satisfaction in E-Procurement in Indian scenario: An integrated ISM and SEM approach
by Manish Gupta
Abstract: E-Procurement is expected to enhance coordination between buyers and suppliers and result in significant mutual satisfaction and economic benefits. However, many organizations that have implemented E-Procurement are highly uncertain about the extent to which the satisfactions are realized. In the present scenario, even though the overall benefits of such systems are established, there is a need to analyze different factors that lead to different levels of buyer satisfaction among different organizations. In this work the ISM model for buyer satisfaction is proposed which is further analytically validated with SEM using AMOS. The results of validation turned out in fair with our developed models for buyer satisfaction. The findings indicate that transparency, improved quality and fulfilling warranty have the maximum driving power whereas long term relationship between buyer-supplier has the maximum driven power. It is furthermore validated in the paper that transparency, improved quality, and fulfilling warranty leads to commitment, cooperation and trust that further on results in long term relationship.
Keywords: E-Procurement; buyer; supplier; buyer satisfaction; Interpretive Structure Modelling; Structure Equation Modelling.
Using mechanism design theory in negotiations to improve purchasing performance
by Ines Schulze-Horn, Niels Pulles, Holger Schiele, Paul Scheffler
Abstract: The purchasing and supply management field persistently seeks new or enhanced negotiation methods to improve purchasing performance. In this regard, mechanism design theory could be applied to make negotiations more effective. By drawing on the basic premises of game theory, mechanism design theory can be used by purchasers to define negotiation rules that incentivise suppliers to reduce purchasing prices. Research on mechanism design theory still appears to be somewhat underrepresented in the traditional purchasing and supply management literature. Therefore, this study provides an introduction to mechanism design theory and explores the benefits of applying it to purchasing and supply management. Additionally, this study presents a case study of 28 projects to examine how mechanism design-based negotiations can be executed and how this negotiation approach differs from conventional approaches. The research shows how mechanism design theory can extend purchasers toolbox of negotiation methods and contribute to purchasing performance.
Keywords: game theory; mechanism design theory; market design; negotiation; purchasing.
EVALUATING CRITICAL FACTORS FOR THE IMPLEMENTATION OF E-PROCUREMENT IN GHANA
by Safowaa Osei-Tutu, Ernest Kissi, Ernest Osei-Tutu, Desmond Addisson
Abstract: E-Procurement implementation in other parts of the world has brought benefits such as efficiency, cost reduction, reduced procurement process, minimized corruption,enhanced compliance and standardization of procurement. Though the Public Procurement Authority has made many strides in the adoption of e-procurement in the Ghanaian Public Sector, the pace for the implementation and adoption is still very slow.Thus, the aim of this study is to evaluate the critical factors for the implementation of e-procurement in Ghana. With the knowledge of these critical factors for e-procurement implementation a survey was conducted involving 60 procurement professionals. The mean score ranking test was then used to determine the factors that were significant to he implementation of e-procurement. The results revealed that availability of internet, power stability ,capacity enhancement of procurement officers, availability of it infrastructure were important critical factors when it comes implementation of e-procurement while the mandatory Use of e-procurement Technical interoperability Budgetary Control among others were of less important. This study therefore evaluate the critical factors for e-procurement implementation in public sectors. The implication is that the findings offers useful factors that will guide the stakeholders and policy makers in e-procurement implementation. It provides practitioners with better understanding of e-procurement environment.
Keywords: E-Procurement,Critical Factors; Ghana; Implementation.
The influence of the Status Quo Bias Theory in the Compliance to Public Procurement Regulations in a Sub-Saharan Economy
by David Asamoah, Jonathan Annan, Diana Effah-Baah
Abstract: The importance of public procurement cannot be overemphasized, as this is a tool for achieving efficiency and value in acquisition of goods, works and services. Public sector bodies are required to conduct public procurement according to public procurement law. However, user resistance to the compliance of the procurement regulations have been reported in extant literature. Yet, there is lack of research on understanding users non-compliance of public procurement laws, especially in sub-Saharan Africa nations such as Ghana. This study uses the Status Quo Bias (SQB) theory to investigate why users fail to comply with the Public Procurement regulations in a Sub-Saharan nation. We collected data from 84 public sector institutions in Ghana and ordinary least square (OLS) regression was used to analyse the measurement and structural models. Three (3) out of the seven (7) hypothesis developed were supported. We offer theoretical and managerial implications.
Keywords: Public Procurement; Status Quo Bias (SQB) theory; Compliance; Firm Resistance; Ghana.
Green supply management in the public and private sector in Hungary
by Gyongyi Vorosmarty, Tunde Tatrai
Abstract: This paper aims to compare the green purchasing practice of the private sector and that of public procurement. Private sector purchasing in western economies is often seen as benchmark for public procurement in terms of efficiency, management processes and management of spending. In this paper we present the results of a literature review and a survey completed in Hungary. The number of publications comparing the two fields is low even in western countries; however the Hungarian data and evaluation show similarities with previous international results. Based on our results supplier management is more important for private organisations, while public entities focus on the procurement process and concentrate on the administrative requirements of national regulations. Due to the lack of East European comparative studies, this paper follows the approach of the European and US literature in terms of concept development.
Keywords: Green purchasing; green public procurement; supplier management.
28 YEARS OF TRACEABILITY MANAGEMENT: Trends, bottlenecks and opportunities
by Dirk-Jan F. Kamann, Jose A. Alfaro, Szabolcs Sebrek
Abstract: This paper shows the evolution of traceability management from 1990-2017 using 124 articles. It lists 73 journals by name, classified in 12 fields of science. We find a dominance of food journals, with journals in supply chain management and IT in a stable second and third position. Articles are coded for 9 possible topics and divided into two categories: theoretical and empirical. An increasing Berry index for the 9 topics shows an increased dispersion across the various topics. Out of the 43 case studies, 36 relate to the food industry, although more recent publications also deal with other sectors. Various relevant theories are discussed and observed bottlenecks are discussed as well as future potential, like using Systems Thinking with Big Data Analysis as an enabler.
Keywords: Traceability; Supply Chain Management; Food industry; Literature Review.
Compliance with transparency provisions in the Public Procurement ACT, 2003 (ACT 663)
by Re. Fr. Baltharzzar Obeng Larbi, Bernard Kofi Baiden, Kofi Agyekum
Abstract: The Public Procurement Act, 2003 (Act 663) was introduced to improve financial management and judicious use of state resources in Ghana. However, many procurement entities in the public sector, especially the Colleges of Education, are said to perform poorly in complying with the key provisions in the Act. This study examines the extent to which the Colleges of Education (COE) in Ghana comply with one of the key provisions; transparency in the Public Procurement Act 663 of Ghana. A questionnaire survey was conducted among 53 Tender Committee members in seven Colleges of Education in Ashanti Region, Ghana. Respondents were interviewed using tools for assessing transparency which were spelt out in five thematic areas to include record of proceedings, giving notice on records, publicizing procurement activities, advertising procurement, and holding proceedings in public. Data obtained was analyzed through percentages, mean scores and relative importance indices. Findings show that the average percentage level of compliance with the transparency provisions in Act 663 among the COEs is 77.4%, indicating that the COEs complied with the transparency provisions in the Act 663. Findings from this study should encourage people in managerial positions in all sectors where procurement is carried out within Ghana to ensure that they comply with the transparency provisions in the act to help fight the menace of corruption.
Keywords: Public procurement; Compliance; Transparency provisions; Recording; Notification; Publicization; Advertising; Proceedings.
Empirical Classification and Effect of Procurement Process on Organizational Performance Outcomes
by Atef Harb, Reine Abou Antoun, Abdallah Kassem, Cesar Baena
Abstract: For many years, Purchasing and Procurement became a major concern for researchers and decision makers worldwide. In Lebanon, the Purchasing functions have become recently a major concern for different organization and industries. The purpose of this research is to investigate the different purchasing clusters of Lebanese industrial organization and to study their effect on organizational management and performance. In order to achieve our objective, two research questions are addressed. (1) How purchasing functions within Lebanese organizations are classified? (2) How do purchasing functions in the Lebanese organizations affect performance outcomes? These research questions have been translated into the following two hypotheses: (H1) Purchasing functions within the Lebanese organizations/industries can be classified based on their level of involvement in strategic planning, status in the eyes of top management, degree of internal integration, and purchasing skills. (H2) Based on different configurations of purchasing characteristics, different purchasing functions will have higher levels of performance outcomes. To answer the research questions and to test the hypotheses, analyses were conducted based on collected data from 95 Lebanese organizations. The researchers developed a research instrument with 19 indicators to measure performance outcomes (PO) as the dependent variable, and 18 indicators to measure purchasing clusters (PC) as the independent variable. Data were collected via a paper-based, telephone, and email survey questionnaire. Using SPSS, descriptive testing, principal component analysis, and linear regression techniques were used to investigate the relationships among variables and to illustrate the impact of (PC) on (PO) in the Lebanese organizations. The results presented that the hypothesized measurement models are valid and reliable to answer the research questions. Findings supported the two hypotheses and showed a statistically significant relation between the two studied variables. As a conclusion, this research assessesed, analyzed and presented the importance of purchasing clusters and showed its positive influence on organizational performance in the Lebanese organizations/industries. The most efficient purchasing functions included strategic planning, purchasing status, internal integration, purchasing skills and affected supplier integration; supplier relationships outcomes, production performance, and financial performance helping all decision makers involved to better control and plan for the best achievements of the optimal decisions and the expected results. The findings will be very useful for researchers and practitioners seeking to improve the performance and standing of the purchasing function through the identification of the different characteristics and potential limitations faced at each phase. Also, they will be very helpful for engineers and IT managers to know the concept for the best implementation of a new engineering system and/or a new software.
Keywords: Purchasing; Procurement; Purchasing Clusters; Performance Outcome; Organizational Performance; Management; Internal Integration; Strategic Planning; Engineering Design.
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
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.
A cluster first-route second approach for a capacitated vehicle routing problem: a case study
by Serap Ercan Comert, Harun Resit Yazgan, Sena Kır, Furkan Yener
Abstract: In this study, a capacitated vehicle routing problem (CVRP) which dealt with minimum distance routes for vehicles that serve customers having specific demands from a common warehouse under a capacity constraint. This problem is NP hard. We solved the problem in a hierarchical way (i.e., cluster-first route-second method). Firstly, customers were clustered using three different clustering algorithms; K-means, K-medoids and random clustering with considering a vehicle capacity. Secondly, routing problems for each cluster were solved using a branch and bound algorithm. The proposed solution strategy was employed on a case study in a supermarket chain. Results of numerical investigation were presented to illustrate the effectiveness of the algorithms using paired sample t tests. The results illustrated that the K-medoids algorithm provided better solution than the others.
Keywords: capacitated vehicle routing problem; CVRP; k-means clustering algorithm; K-medoids clustering algorithm; random clustering algorithm; branch and bound algorithm.
E-procurement and SME involvement in public procurement of innovations: an exploratory study
by Jani Saastamoinen, Timo Tammi, Helen Reijonen
Abstract: Current public procurement policies in the European Union (EU) seek to improve small and medium-sized enterprises' (SMEs) access to public procurement, and emphasise public procurement of innovations (PPI) and aim to promote a switch to e-procurement. However, many information and communication related barriers impede SME access to public sector contracts, which could be mitigated by knowledge management (KM). While e-procurement is expected to increase the involvement of SMEs in public procurement, it is not well-understood how or which KM properties of an e-procurement service will best facilitate PPI. This paper presents an exploratory inquiry of how suppliers perceive the properties of an e-procurement platform, and how these properties are associated with their involvement in PPI. The results show that while information exchange properties were not estimated to be as important as other properties they are nevertheless more important in the sense of being positively associated with participating in PPI.
Keywords: public procurement; public innovation procurement; electronic procurement; e-procurement; small and medium-sized enterprises; SMEs; innovations; knowledge management; suppliers; public sector; contracting authorities; information exchange.
Multi item two-warehouse fuzzy inventory model
by R.H. Waliv, H.P. Umap
Abstract: In this paper multi-item fuzzy profit maximisation inventory model with ramp type demand under imprecise space, budget constraints and imprecise holding cost with two storage facilities are presented. There are two warehouses, one is situated at market place called as own warehouse (OW) and another is little away from market place called as rented warehouse (RW). The sale is conducted from OW and the sold items are replaced continuously by the items at RW. Here shortages are not allowed. The fuzzy model has been solved by using fuzzy nonlinear programming technique and illustrated numerically.
Keywords: ramp type demand; deteriorating items; linear membership function; fuzzy nonlinear programming technique.
A framework for assessment of SSCM strategies with respect to sustainability performance: an Indian thermal power sector perspective
by Jitendra Narayan Biswal, Kamalakanta Muduli, Suchismita Satapathy, Sushant Tripathy
Abstract: The explosion of the population in India has put a tremendous pressure to generate huge amount of energy, particularly electrical energy. Indeed, more than 50% of the total electrical energy produced in the country is generated by the coal based thermal power plants and is expected to be continued for another 2-3 decades. Growing concern over the environmental effects caused by the supply chain activities of the power industries that affects ecosystems and quality of life adversely as well natural resource depletion has been drawing attention of organisations to focus on sustainability practices. Realising the importance of sustainable practices in traditional supply chain management, an effort has been made to develop a framework by using AHP TOPSIS to study SSCM strategies. The findings of the research will facilitate the analysis and assessment of managerial approaches for SSCM in power generation facilities with its differing aspects rather than few limited aspects.
Keywords: thermal power plants; sustainable supply chain management; SSCM; AHP-TOPSIS.
A game theory model for pricing and supplier selection in a closed-loop supply chain
by Maryam Esmaeili, Somayeh Najafi Ghobadi
Abstract: In this paper, pricing and supplier selection in a closed-loop supply chain (CLSC) are modelled by a game theory approach. The CLSC includes one manufacturer and multi-suppliers. The manufacturer collects the used products where the number of defective parts purchased from the suppliers is random variable. The suppliers determine standard deviation and the wholesale price. For the defective parts greater than the expected number, the manufacturer penalises the suppliers. The manufacturer determines the optimal selling price, the price of collecting a used product, appropriate suppliers, and the penalty cost by maximising the profit. The end demand is affected by the selling price, and the competition between the suppliers is considered based on the Bertrand model. The interaction between the manufacturer and the suppliers is modelled by the static and dynamic games to obtain Nash and Stackelberg equilibriums. Finally, the numerical examples and sensitivity analysis are presented to illustrate the theoretical results.
Keywords: closed-loop supply chain; CLSC; supplier selection; pricing; game theory; defective parts; static game; dynamic game; Bertrand model; penalty cost.
The effect of product quality uncertainty on quality-screening efforts: does the purchase frequency and procurement channel choice matter?
by Renger Kanani, Arnt Buvik
Abstract: Product quality uncertainty is one of the major concerns for buyers in online transactions. In fact, research into the consequences and control of this uncertainty in online transactions has increased considerably in recent years. However, product quality uncertainty poses challenges not only to online buyers, but also to offline buyers. Therefore, the objectives of this empirical study were to examine the effect of product quality uncertainty on quality-screening efforts in offline transactions, and whether the frequency of purchase from the same source and the choice of procurement channel may be used as control mechanisms to reduce this effect. Empirical evidence from 239 small food-processing firms shows that product quality uncertainty has a positive effect on quality-screening efforts. Moreover, our findings demonstrate that this effect decreases significantly when food processors purchase frequently from the same source, and when they buy directly from the farm rather than through intermediaries.
Keywords: quality screening efforts; product quality uncertainty; purchase frequency; procurement channel.
An inventory model for deteriorating items with time dependent holding cost and shortages under permissible delay in payment
by Nabendu Sen, Sumit Saha
Abstract: This study is motivated by the work of Khanra et al. (2011, pp.1-9). We have revisited their model taking into account the following points: 1) the demand rate as a + bt + csin(t); 2) shortages are allowed; 3) delay in payment is permissible under three different cases, i.e., case I: the credit period is less than the time of occurrence of shortages, case II: the credit period is greater than the time of occurrence of shortages and case III: the credit period is greater than the cycle time. Under these aforesaid assumptions, an inventory model is developed and solved to obtain optimal solutions for inventory system with deteriorating items. An algorithm is proposed to solve the developed model. Finally, numerical examples are given in support of the developed model and sensitivity analysis is carried out with suitable example. Justification for extension of the existing model in literature with above mentioned demand function and linear time dependent holding cost is also discussed in this paper.
Keywords: delay in payment; inventory costs; deterioration; backlogged; profit; demand rate; shortage changes slightly; significant changes; fluctuations in rate of demand; lead time.