A decision model for supplier selection in the presence of dual-role factors

Abstract

Best suppliers help manufacturers to gain and sustain a competitive advantage by improving product quality, reducing cost, shortening lead-time and so on. The crucial role played by suppliers in a supply chain renders the selection of a supplier or suppliers a significant work that attracts the attention of both researchers and practitioners. In the literature, data envelopment analysis (DEA) as a nonparametric technique is often applied to conduct a performance analysis. Little attention, however, has been paid to dual-role factors in the supplier selection process. This paper proposes a novel two-step approach to select suppliers in the presence of dual-role factors. As a combination of DEA and two-person zero-sum game theory, our work considers the strategic behaviour of the external environment and is able to handle the supplier selection in a competitive environment. Moreover, the proposed model circumvents the requirement to specify the status of a dual-role factor ahead of an evaluation and is easy to solve. Finally, the applicability of the procedure is illustrated by an application to a data set of 18 suppliers.

Keywords:

• supplier selection
• dual-role factor
• data envelopment analysis
• two-person zero-sum
• game theory

Acknowledgements

The authors are grateful for the comments and suggestions by two anonymous reviewers. This research is supported by National Natural Science Funds of China (Nos. 71301155, 71171181, 71301037), National Natural Science Funds of China for Innovative Research Groups (No. 71121061), and the Fundamental Research Funds for the Central Universities.