Multiple sourcing strategies and order allocation an ANPAUGMECON metamodel

Purpose The strategic importance of sourcing is inherent in the positioning of the purchasing operation in a supply chain and supplier evaluation a crucial step in sourcing is a complex multicriteria decision making MCDM problem. The purpose of this paper is to provide a metamodel for supplier evalu...

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Bibliographic Details
Published in:Supply chain management 2010-06, Vol.15 (4), p.263-276
Main Authors: Kirytopoulos, Konstantinos, Leopoulos, Vrassidas, Mavrotas, George, Voulgaridou, Dimitra
Format: Article
Language:English
Subjects:
Buyerseller relationships
Decision making
Greece
Supply chain management
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Summary:Purpose The strategic importance of sourcing is inherent in the positioning of the purchasing operation in a supply chain and supplier evaluation a crucial step in sourcing is a complex multicriteria decision making MCDM problem. The purpose of this paper is to provide a metamodel for supplier evaluation and order quantity allocation, based on a MCDM method, namely the Analytic Network Process ANP and a multiobjective mathematical programming method MOMP, the AUGMECON. Designmethodologyapproach The proposed approach consists of two parts. The former develops and applies the ANP method in order to evaluate the suppliers in qualitative terms. The latter implements the AUGMECON method in order to find the Pareto optimal solutions for the allocation of order quantities in a multiple sourcing environment. The integrated metamodel is exposed through an illustrative case concerning the parapharmaceutical enterprise cluster in Greece. Findings The proposed metamodel constitutes an efficient method that enables managers to actively participate in the decision making process and exploit the qualitative value of their suppliers, while minimizing the costs and the mean delivery times. In addition, it is proved to be suitable for the enterprise clusters, as it adapts a multiple sourcing strategy and enhances the partnership among the members. Research limitationsimplications The outcome of the model is highly dependent on the inputs provided by the decision maker. Moreover, the ANP method is computational intensive, but this limitation can be alleviated by appropriate software tools. Originalityvalue The proposed metamodel is an innovative approach for decision making in the area of multiple sourcing and order allocation.
ISSN:1359-8546
DOI:10.1108/13598541011054643