Title: VEPCE: decision-making model for vendor evaluation with respect to product prioritisation and customer expectation

Authors: A. John Rajan, K. Suryaprakasa Rao, K. Ganesh

Addresses: Department of Mechanical and Production Engineering, Sathyabama Deemed University, Chennai 600119, India. ' Department of Industrial Engineering, Anna University, Chennai 600036, India. ' Department of Management Studies, Indian Institute of Technology Madras, Chennai 600036, India

Abstract: Vendor performance analysis is a significant area of research in supply chain management. Several researchers have addressed the strategic importance of vendor evaluation and the selection process. These studies have mainly emphasised the impact of vendor selection on various functional areas of business, from procurement to delivery of the products to the end customers. The traditional performance measurement methods of vendor selection primarily considered financial measures and manufacturing strategies in the decision-making process. This paper presents a multi-phase decision-making model called VEPCE to evaluate and select a set of vendors for a set of products with respect to product prioritisation and customer expectations. In the first phase, the profitability rank order for the set of products is obtained using profit ratio analysis. Then, customers are prioritised using the Analytic Hierarchy Process (AHP) in the second phase. We employ critical value analysis in the third phase to prioritise the products based on profitability rank order and customer expectations. In the fourth phase, we evaluate the set of vendors for the set of products using AHP. Finally, an assignment model is used to allocate the specified vendor for each product based on priority. A case study is presented to demonstrate the vendor selection using VEPCE.

Keywords: vendor selection; product prioritisation; customer expectation; analytical hierarchy process; AHP; decision making; vendor performance; performance evaluation; supply chain management; SCM; performance measurement.

DOI: 10.1504/IJLSM.2007.012069

International Journal of Logistics Systems and Management, 2007 Vol.3 No.1, pp.34 - 55

Published online: 16 Jan 2007 *

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