i
i i
w
p w
2. Dimensional Analysis (DA)
Where,
xi criterion performance score of supplier x
yi criterion performance score of supplier y
DA > 1 x > y
[
=
|
|
.
|
\
|
=
n
i
w
i
i
i
y
x
DA
1
3. Standardized Unitless Rating (SUR)
Fuzzy bag approach for qualitative criteria
Given a line segment [0,1], evaluator marks
xij : How unsatisfactory performance of ith supplier w.r.t. jth
criterion
yij : How satisfactory performance of ith supplier w.r.t. jth
criterion
Average score aij = (xij + yij)/ 2
Inconsistency rij = | xij yij|
aj , amax,j & amin,j Mean, maximum & minimum values
among all suppliers w.r.t. jth criteria
| |
=
=
(
(
(
(
(
(
=
n
j
n
j
j
j
ij
j j
j ij
i
w
w
r
a a
a a
SUR
1
1
min, max,
1
4. Analytic Hierarchy Process (AHP)
Supplier Selection
Quality Delivery Technical Capability
Percentage Inspection Awareness
Rejection model of TQM
On-time Delivery Delay
Delivery Delay Variations
Product Process Flexibility
s
1
s
2
s
3
s
1
s
2
s
3
.
5. Multiple Objective Programming Model
Min z = (z1, z2, z3)
Subject to xj s min (vjU, wjU) yj for all j
xj > max (vjL, wjL)yj for all j
x
j
> 0 for all j
y
j
e (0, 1) for all j
=
>
n
j
j
D x
1
=
=
n
j
j
p y
1
=
=
n
j
j j
x A z
1
1
=
=
n
j
j j
x B z
1
2
=
=
n
j
j j
x C z
1
3
yj = 1; if vendor j is selected
= 0; otherwise
xj = Quantity purchased from vendor j during the period
n = number of competing vendors
p = number of vendors to be selected
Aj = per unit purchase cost from vendor j
Bj = percentage of items late for vendor j
Cj = percentage of rejected items for vendor j
D = Aggregate demand for the material during the planning
period
VjU = Maximum amount of business to be given to vendor j
VjL = Minimum amount of business to be given to vendor j
WjU = Maximum order quantity vendor j is capable to supply
WjL = Minimum order quantity vendor j is capable to supply
Goal Programming
Minimize F = d
1
+
+ d
2
+
+ d
3
+
n
Subject to A
j
x
j
+ d
1
-
- d
1
+
= T
1
j=1
n
B
j
x
j
+ d
2
-
- d
2
+
= T
2
j=1
n
C
j
x
j
+ d
3
-
- d
3
+
= T
3
j=1
n
x
j
D x
j
min(v
j
U
, w
j
U
) y
j for all j
j=1
x
j
max(v
j
L
, w
j
L
) y
j for all j
n
y
j
=p x
j
0 for all j
j=1
y
j (0,1)
for all j
Where the three T s are target or expected values.
Development and maintenance of suppliers relations
involve various issues of strategic importance
entangled with the SCM strategies of the organization.
However the following may be considered as the
important guidelines in this endeavor.
Information and know-how sharing in general
Training programs for engineers and managers of supplier
firms
Exchange of information on process and technology
development
Collaboration in forecasting, research and innovations in
product design and development
Mutually beneficial policies on rates, delivery, storage, etc.
A survey result shows the integration of
manufacturers with suppliers in various ways.
On an average number of suppliers has been
reduced by 20% in 5 years, 60% of the
manufacturers opt for JIT delivery for key
suppliers and 54% of them ask for cost
reduction. 80% of the manufacturers under
survey involve key suppliers in product design
and almost 50% has developed software
linkages with suppliers.