International Journal of Procurement Management (23 papers in press)
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.
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.
Ethical Issues in Modern Business Management
by Mohammed Nuseir, Ahmad Ghandour
Abstract: The ethical issues in business management have always been co-existing, but their type and quantum have been changed in the present digital world. The globalisation and digitisation of business have not only altered the ethical issues but also their gravity, as evidenced by the widening of problems and complaints. In the 21st century, business management is becoming more complex while a multitude of ethical issues appears simultaneously. Thus, an in-depth understanding of ethical problems and identification of mitigating options is required, for which these review efforts have been undertaken. Highly relevant research studies were selected from the literature and presented in a critique style, elaborating both sides of the picture. Significant findings were documented logically with consequent conclusions.
Keywords: Harassment; Discrimination; Social Networking; Financial Transparency; Managing ethical issues.
The Role of Public Procurement in Socio-Economic Development
by Intaher Marcus Ambe
Abstract: This paper investigates the role of public procurement plays to socio-economic development in a provincial government, South Africa. Since 2004, public procurement has gained significance in the country. It is used as an enabling mechanism by the South African Government to implement policies aimed at inclusive growth, socio-economic development and transformation. The paper is exploratory and descriptive in nature, based on a survey conducted among procurement practitioners. The findings revealed that public practitioners in the province do acknowledge the strategic role of public procurement in socio-economic development. However, public procurement practices are not adequately implemented in line with government imperatives to accelerate inclusive and socio-economic development. There is a need to re-organise and re-align organisational structures in the province to improve public procurement practices. It is therefore critical that an effective public procurement capacity development programme and professionalisation path be established; ethics and good governance be enforced; and the importance of strategic procurement be capitalised to accelerate socio-economic development.
Keywords: Public procurement; socio-economic development; provincial government; South Africa.
Stochastic Inventory Model with Income and Price Dependent Demand
by Rahul Waliv, Hemant Umap
Abstract: A multi-item cost minimising stochastic inventory model is developed in stochastic environment. Demand is considered to be function of income level of consumer and price of commodity. Budget, income and price are assumed to be random and their randomness is expressed by normal distribution. Deterioration rate is modelled using Weibull distribution. Stochastic inventory model is converted into equivalent crisp inventory model by using stochastic nonlinear programming (SNLP) technique. Crisp problem is solved by fuzzy nonlinear programming (FNLP) technique and intuitionistic fuzzy optimisation (IFO) technique. Sensitivity analysis of the optimum solution with respect to feasible changes in average and variance of income level and price is discussed and conclusions are noted.
Keywords: Weibull distribution deterioration; Price and income dependent demand; stochastic nonlinear programming; Fuzzy nonlinear programming technique; Intuitionistic fuzzy optimization technique.
Third-Party logistics service providers (3PLSPs) Selection & evaluation: A hybrid AHP-DEA-COPRAS-G group decision-making approach
by Rakesh Raut, Bhaskar Gardas, Shamik Pushkar, Balkrishna Narkhede
Abstract: The objective of this study is to identify the best third-party logistics service provider (3PLSP) by using a hybrid approach, i.e., analytical hierarchy process (AHP) data envelopment analysis (DEA) grey-complex proportional assessment (COPRAS-G). In the first phase, AHP was used for determining the priority weights of criteria. Secondly, data envelopment analysis (DEA) for selecting the efficient service providers based on the AHP weights, and lastly COPRAS-G was applied for obtaining final ranks of 3PLSPs for fast moving consumer goods (FMCG) supply chain in the Indian context. The criteria used in this study were obtained by taking inputs from the experts of the case supply chain. Total ten criteria were considered namely freight cost/km, fleet capacity, vehicle quality/order, drivers quality and acceptance rate/order, distance target achieved, flexibility capability, on-time delivery, financial strength/turn over, customer support and service, and training learning and growth. A criteria namely freight cost/km was found to be the most significant and out of thirty 3PLSPs a service provider namely V2 was found be the best one. This study forms guidelines for the academicians as well as practitioners for the smooth decision-making process of 3PLSPs evaluation and selection.
Keywords: Third-party logistics; performance evaluation and selection; group decision making; analytic hierarchy process; data envelopment analysis; COPRAS-G; FMCG supply chains.
Application of the Theory of Convenience to a Case of Illegal Public Procurement of Health Care Services
by Petter Gottschalk
Abstract: We address the following research question in this article: how can convenience theory in terms of motive, opportunity, and willingness explain deviant behaviour in the case of public procurement of healthcare services in a Norwegian municipality? This research is important, as it can identify motives at the individual and organisational level, opportunities at the organisational and societal level, and willingness at the individual level, even when there is not necessarily corruption involved. The application of convenience theory is by no means an excuse for violations of laws and regulations. Rather, this article demonstrates where prevention of misconduct and crime needs attention. It is particularly at the organisational level, where opportunity structures tend to enable commitment and concealment of illegitimate financial transactions. When auditing and other forms of control are de facto absent, where the blame game occurs, and where it is impossible to trace events because documents and e-mails have disappeared, then misconduct and crime become convenient options.
Keywords: white-collar crime; public procurement; convenience theory; neutralization techniques; opportunity structures.
A rapid method for sustainable supplier selection in pharmaceutical distribution companies under uncertainty circumstance
by Nassibeh Janatyan
Abstract: According to rapid changing in firms environment, managers have to select suppliers faster to survive in the competitive market. Nowadays, global community expect companies to consider the environmental and social aspects of their decisions. In this study, rapid technique has been used to prioritise suppliers considering three bottom lines of sustainability, i.e., economic, social, and environmental aspects in field of pharmaceutical industry in uncertain conditions. This method is useful for managers to select suppliers rapidly and sustainably in unsure circumstance. In this research, important factors for selecting suppliers have been chosen. By using fuzzy AHP technique in uncertainty circumstance and the automatic clustering of data in decision table via genetic algorithm (to reduce the calculations of decision table), suppliers would be prioritised. This method was tested in Daroupakhsh pharmaceutical distribution company in Iran to prioritise suppliers of Clopidogrel drug.
Keywords: supplier selection; Uncertainty; Pharmaceutical supply chain; Fuzzy number; Genetic algorithm.
The Impact of Internal and External Factors on Sustainable Procurement: A Case Study of Oil Companies
by Ajmal Mian, Mohammed Hasan Alhashmi, Mehmood Khan
Abstract: The contentious and growing sustainability concerns within the UAEs oil and gas industries have highlighted the necessity of systematically examining the internal and external organisational factors that influence sustainable procurement (SP) in the industry. This study investigates the internal and external factors most influencing SP in the UAEs oil and gas industry. Utilising questionnaires, the researcher obtained data from 100 procurement professionals working in three oil and gas companies operating in the UAE. The research framework, developed through an extensive literature review, was analysed and tested using structural equation modelling (SEM). The results reveal that both internal and external factors have a positive and statistically significant impact on sustainable procurement, although internal factors have a relatively greater effect. This study found that leadership in change management, internal management structure, management strategy, and infrastructure cost management, are the most influential internal factors affecting SP, whilst social and economic factors are the most influential external factors. An emphasis on these internal and external factors can help oil and gas companies operating in the UAE greatly improve their level of SP performance.
Keywords: Internal factors; External factors; Sustainable procurement; Oil industry.
Is advertising on social media effective? An empirical study on the growth of advertisements on the Big Four [Facebook, Twitter, Instagram, WhatsApp]
by Mohammed Nuseir
Abstract: The past decade has witnessed a rise in the use of social media for communication. Social media have created virtual spaces that businesses use to sell their goods and services. Platforms such as Facebook, Twitter, WhatsApp and Instagram (the Big Four) have become known for linking individuals through text, pictorial, and video messaging, thus creating a way of passing information to customers instantly in a way that creates appeal. An evaluation of the level of involvement of customers with the Big Four indicates that businesses choose their social media platform based on the likelihood of reaching customers. This study identified the reciprocal relationships that businesses have with their customers via the four main social media platforms. This relationship has been created because customers feel they have an individual space in social media, and because the businesses that advertise on social media use personalised messaging to their advantage. This ownership and personalisation speaks to the degree to which relationships are formed between corporate entities and individuals in contemporary society.
Keywords: Advertising; Interactive; Communication; Information; Social media; Platforms; Big Four.
Incorporating Risks and Costs into Global Sourcing Decisions
by Satyendra Kumar Sharma, Ravinder Singh, Rajesh Matai
Abstract: The aim of this research paper is to develop a cost model that incorporates the minor cost factors that are often ignored while making major sourcing decisions. Literature review and excerpts have been studied in detail showing the progress in research over the years. An appropriate methodology was designed to do so. Several subjective factors were also quantified in order to calculate the costs. The DEA approach was used to calculate the weighted sums of inputs and outputs and hence the efficiency rate. Based on the rate, the beneficial supplier was chosen. The company allocated 200 million INR for outsourcing. The method figured out that even with the best choice being selected, approx 112 million INR would actually be consumed, taking into account many factors. A well developed approach and strategy for offshoring greatly affects the total cost of outsourcing.
Keywords: Strategic Sourcing; Total Cost of Ownership; Landed Cost Model; DEA Approach; Global Supply Network.
Multi-objective Optimization Approach as Decision Making Support for Product Mixing and Raw Material Allocation Planning
by Sutrisno Sutrisno, Solikhin Solikhin, Purnawan Adi Wicaksono
Abstract: This article is addressed to discuss a newly developed decision making support by using multi-objective optimisation approach for production planning and supplier selection problem of raw material. The problem faced is finding an optimal value for the planned production volume of each product at each time period and the raw material volume that should be purchased from each supplier for each type at each time period such that the total occurred cost is minimal and all occurred constraints are satisfied. We have solved the problem by finding the Pareto set to be the optimal solution by initially converting it into single objective optimisation by means of weighting method. From the computational simulation, the optimal decisions were obtained for all time periods which are the optimal volume of each raw material type that should be purchased from each available supplier, and the planned optimal volume of each product to be produced.
Keywords: Decision making support; Multi-objective optimization; Product mixing; Raw material allocation.
A fuzzy inventory model for linear deteriorating items with selling price dependent demand and allowable shortages under partially backlogged condition
by S.K. INDRAJITSINGHA
Abstract: In the present study, we investigate a fuzzy inventory model for linear deteriorating items in which demand depended upon the selling price. Shortages are allowed and are partially backlogged with a rate dependent on the duration of waiting time up to the arrival of next lot. This study has been done with two types of model; first one is crisp model and second is fuzzy model. In crisp model the parameters are considered as real numbers and in fuzzy model, these are taken as triangular fuzzy numbers. Graded mean integration representation method, signed distance method and centroid method are used to defuzzify the total cost function. Numerical example is given to validate the model and sensitivity analysis of different system parameters are carried out to study the effect of changes by using Mathematica software.
Keywords: Inventory; Triangular Fuzzy Number; Graded Mean Representation Method; Signed Distance Method; Centroid Method; Defuzzification.
Efficiency and Bid Rigging in Simultaneous Procurement Auctions under an Oligopoly
by Aaro Hazak, Tanel Kerikmäe, Evelin Pärn-Lee
Abstract: Splitting of large procurements into several smaller ones has been propagated, for example in the European Union and OECD members, as a way for enhancing competition and improving institutional framework for market efficiency. This paper presents a conceptual argumentation on the causes and consequences of potential bid rigging when simultaneous bids for similar goods are asked from oligopolists. It appears that calling for similar bids simultaneously may incentivise collusion among bidders, while arranging several consecutive procurement auctions could lessen that problem. Moreover, simultaneous procurement auctions may result in a relatively high cost of supply due to the larger risks involved for bidders. Furthermore, bid rigging remains difficult to detect under simultaneous procurement auctions due to a large degree of uncertainty for bidders, which supports relatively high bid prices that may, in fact, be collusive.
Keywords: bid rigging; collusion; oligopoly; umbrella pricing; simultaneous procurement auctions.
Analysis of Relationships of Third Party Logistics Enablers Using Multi-Criteria Decision Making Technique DEMATEL-Based On ANP (DANP)
by Maryam Aliei, Mostafa Kazemi*, Amir Mohammad Fakoor Saghih, Zahra Naji-Azimi
Abstract: Globalisation and adapting to market conditions, the existence of competitive pressures, such as the entry of emerging companies into the competition market and the need for increased investment costs, has led manufacturers to improve their innovative ways of serving customers. The third party logistics (3PL) Provider is an external supplier that manages, controls and performs logistic activities on behalf of the customer. In this paper, seven major dimensions of third-party logistics enablers have been evaluated with MAXQDA(v11) software and using literature review, text content analysis and specialised interview with 16 experts from the logistics industry, then using the DANP technique. The results of the Analysis in relation-impact diagrams show that the most important enablers are: manufacturing, technical and marketing and sales, financial, human resources and strategic enablers, respectively. Also, technical and manufacturing enablers are of the most influential enablers, and has the most interaction with other enablers as well.
Keywords: Third Party Logistics (3PL); empowerment; DANP; Multi-Criteria Decision Making Introduction.