Title: Suppliers ranking in the presence of undesirable outputs

Authors: Abdollah Noorizadeh; Mahdi Mahdiloo; Reza Farzipoor Saen

Addresses: Faculty of Management and Accounting, Department of Industrial Management, Islamic Azad University – Karaj Branch, P.O. Box 31485-313, Karaj, Iran. ' Faculty of Management and Accounting, Department of Industrial Management, Islamic Azad University – Karaj Branch, P.O. Box 31485-313, Karaj, Iran. ' Faculty of Management and Accounting, Department of Industrial Management, Islamic Azad University – Karaj Branch, P.O. Box 31485-313, Karaj, Iran

Abstract: In conventional usage of Data Envelopment Analysis (DEA) for supplier selection, it is assumed that producing more outputs relative to fewer inputs is a criterion of efficiency. However, in the presence of undesirable outputs, suppliers with more good (desirable) outputs and less bad (undesirable) outputs relative to fewer inputs should be recognised as efficient. In addition, to get a complete ranking among suppliers and also eliminate unrealistic weighting schemes among them, this paper proposes a cross-efficiency formulation of DEA, which can treat undesirable outputs. A numerical example demonstrates the application of the proposed model in supplier ranking context.

Keywords: supplier ranking; DEA; data envelopment analysis; cross-efficiency; undesirable outputs; supplier evaluation; supply chain management; SCM.

DOI: 10.1504/IJLSM.2012.045918

International Journal of Logistics Systems and Management, 2012 Vol.11 No.3, pp.354 - 374

Published online: 13 Mar 2012 *

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