Combined Supplier Selection Method Based on Multicriteria and Total Cost Evaluation with the Toolkit for Strategic Decision-Making
MAGAZINE №1 (102) - 2021
AUTHOR BURLAKOVA I.V.
CATEGORY Sourcing
ABSTRACT
For today there is no single universal methodology for evaluating and selecting a supplier. Each commercial organization develops an assessment methodology individually, based on a variety of criteria that are considered important, or focusing on the cost of purchase. The downside of choosing a vendor based on cost criteria only is ignoring other significant criteria, while systems with multiple criteria often allow valuation bias and options for result manipulation. In this article modern methods of supplier evaluation are analyzed, giving more attention to the most common ones. Taking into account their merits and shortcomings, the author's combined method has been developed, which consists in simultaneously assessing the supplier with multicriteria and single-criteria (total cost method) methods and decision-making using the Edgeworth-Pareto method. Pareto-suboptimal solutions are cut off by an algorithm based on Pareto optimal set formula. The remaining options are assessed by the purchasing manager in terms of strategic importance by applying the "strategic matrix of supplier choice" proposed by the authors. It is a modification of Kralich matrix, adapted to the task of supplier selection, for which the author's scale of assessment is proposed. The proposed supplier evaluation method allows to compare the financial benefits of selecting a particular supplier and a combination of other significant factors, and make an informed managerial decision.
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Diversified Optimization of the Supply Strategy Parameters with a Possibility of Vehicles Selecting with Account of Their Cargo Capacity
MAGAZINE №5 (82) October 2017
AUTHORS GERAMI V.D., KOLIK A.V., SHIDLOVSKIY I.G.
CATEGORY Optimization and mathematical modelling Inventory management
ABSTRACT
A new improved algorithm to optimize the parameters of a diversified supply strategy considering the transportation features for the EOQ-models is proposed. When optimizing decisions it will allow for the first time to take into account the following attributes of the simulated supply chain: 1) cargo capacity of the vehicles used; 2) a possibility of selecting their types when delivering goods; 3) the format of paying storage costs (rent or paying only for occupied places at the warehouse); 4) expediency of deliveries using several vehicles if there are discounts on the cost of such deliveries; 5) factor of time value of money taking into account the efficiency of cash flows of the supply chain itself; 6) assessment of the expected return on the working capital of the simulated supply chain; 7) specificity of such a profitability indicator taking into account the utilization of the cargo capacity of the vehicles used at the deliveries. This algorithm was developed with reference to special EOQ-models. Namely, it relates to a class of models interesting and important for business when profit can be made at each reorder interval. The models in question are those where profit during the reordering interval can be used both to cover part of the costs at that interval and to make payment of the next delivery. Therefore, the format of the algorithm will consider necessary and sufficient conditions fulfillment of which allows to ensure the possibility of these payments from the profit during the supply chain operation.
Keywords:
Estimation of economic efficiency the «just in sequence» deliveries
MAGAZINE №2 (73) April 2016
AUTHORS
KUZIN D.A. - Candidate of Technical Sciences, Associate Professor, Department of Production Management
and Logistics, National Research University Higher School of Economics (Nizny Novgorod, Russia)
KIRIENKO A.S. - National Research University Higher School of Economics (Nizny Novgorod, Russia)
CATEGORY Logistics production Corporate logistics industrial companies Modern concepts and technologies in logistics and supply chain management
ABSTRACT
The article discusses the features of the practical implementation of the concept of supply «just in sequence» (JIS). Relevance of the topic due to the need to improve the traditional methods of supply in connection with the expansion of the range of consumer preferences in the highly competitive market and the need to reduce logistics costs. The general principles and the practical results of the implementation of JIS-deliveries on the example of automobile plants are given. The formulas to calculate the costs per unit of JIS-deliveries are given. The analysis of the JIS-deliveries economic efficiency compared to deliveries «just in time» (JIT) is made. The findings suggest that the compact arrangement of products supplied to the JIS-carts, and their turnover can reduce the cost per unit of delivered products several times. In addition, the application of the concept of JIS-deliveries brings significant economic advantages as a result of logistics «pull» techniques and lean production that can reduce buffer zones for storage of semi-finished products and reduce storage areas for delivered products. According to the criterion of logistics costs per unit of output, investigated the optimal scope of JIS – deliveries depending on transport distances. The study showed that the JIS-deliveries over short distances (up to 10km) are more beneficial than those deliveries over long distances.
The reasons of reducing the effectiveness of the JIS – deliveries over long distances are given as a result of violation of the principle of «through-load unit.» Practical recommendations are given for the broad implementation and improvement of economic efficiency of JIS-deliveries; the requirements to unified information system are formulated.
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