A Decision Support System for Supplier Evaluation and Order Allocation M.A. Thesis By Emir Göçen...
-
Upload
jane-fowler -
Category
Documents
-
view
218 -
download
2
Transcript of A Decision Support System for Supplier Evaluation and Order Allocation M.A. Thesis By Emir Göçen...
A Decision Support System for Supplier Evaluation and Order Allocation
M.A. Thesis By Emir Göçen
Supervised by Aslı SencerDepartment of MIS
November 2008
2
Objectives of the Thesis Study
Focus on the improvement of supplier evaluation and order allocation process of one of the leaders of the white-good manufacturers in Turkey.
Develop a decision support system (DSS) to increase the quality and speed of decision making for this company.
3
Related Studies in Recent Literature
Four inspiring studies:– Ghodsypour & O’Brien (1998): AHP-LP
– Çebi & Bayraktar (2003): AHP & LGP
– Wang et al. (2004-2005): AHP &PGP
Other studies:– Dağdeviren & Eren (2001)
– Ghodsypour & O’Brien (2001)
– Lee et al. (2001)
– Muralidharan et al. (2001)
– Bayazit & Karpak (2005)
– Bei et al. (2006)
– Perçin (2006)
– Aguezzoul & Ladet (2007)
– Pehlivan (2007)
– ...
4
Current Purchasing Process
Marketing Dept. forecasts next years
sales figures.
Budget is approved by the management.
Production Dept. runs MRP and calculates the
supply item requirements.
List of possible suppliers are given to the Purchasing
Dept.
Tough negotiations are made with
suppliers for annual order allocation.
Suppliers are selected
Production Dept. gives order directly to the suppliers through
ERP.
Supplier performance evaluation is
conducted twice a year.
5
Analytic Hierarchy Process
A multi-criteria decision making methodology developed by Thomas Saaty in 1986.
Enables decision makers to design the decision making process in a hierarchical structure, demonstrating the relationship between the aim, criteria and the alternatives.
Fundamental scale given below is used in pair-wise comparisons.
6
Supplier Evaluation Model Proposed
Supplier Evaluation
Cost
Quality
Logistics
Technology
Perfect Order Fulfillment
After Sales Service
Application of Quality Standards
Unit Purchase Price
Terms of Payment
Cost Reduction Projects
Improvement Efforts in Tech. &
Quality
Involvement in New Product Development
On Time Delivery
Order Lead Time
Delivery Conditions &
Packaging Std.
Flexibility of Transport
Allocated Capacity
Flexibility of Technology
Flexibility of Capacity
Supplier 1
Supplier 2
Supplier 3
Supplier 4
Supplier n
Geographic Distance
Corrective & Preventive Action
System
...
7
Goal Programming Model
Concepts of linear programming expanded to meet the multi-objective conditions for optimum target levels.
General form of goal programming model:
8
Order Allocation Model Proposed
Goals included in the model:– Maximize the overall utility
– Minimize total cost
– Maximize overall delivery performace
– Minimize defective material level
– Maximize overall rework performance
Regular constraints included in the model:– Satisfy demand
– Satisfy supplier quantitiy
– Allocate a minimum order
The objective of the model:– Minimize the deviation from the goal targets
9
Order Allocation Model
10
Order Allocation Model
11
Order Allocation Model
12
Order Allocation Model
13
Order Allocation Model
14
DSS Framework
Supplier Evaluation
Model(AHP)
Database
Order Allocation
Model(GP)
Criteria Weights
Supplier Comparison
Supplier Grades Sensitivity Reports
Scenario Analysis
Annual Quota Allocation Among Suppliers
Goals &
Other Inputs
-Annual Quota
- ...
Supplier Inputs
Supplier Inputs
Supplier Inputs
15
Conclusion
DSS is developed to improve the quality and the speed of the decision making process of the company.
It has been stated by the purchasing managers that it was difficult to make sure that the comparisons of main and sub-criteria were consistent. Software is enhanced to give feedback and detailed information on consistency is provided.
Another feedback was that the order allocation model only consisted of quantitative goals and constraints. It has been emphasized that the DSS is a tool to aid the decision maker and it is not developed to replace the decision maker. It has been proposed to develop scenario analysis function for the DSS.
16
Conclusion (cont’d)
As future work, simulation can be integrated to the DSS after the execution of the order allocation model. Applying Monte Carlo simulation, the real world imitation of the purchasing process can be realized.
Another enhancement can be developing the supplier evaluation model with group decision making perspective. In that case, the decision makers will list the main and sub-criteria and vote for them seperately. Then the selected criteria will be evalauted by each decision maker and the overall supplier grades will be calculated according to the weightings of each decision maker on the evaluation process.
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens
DSS Screens