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Multivariate supplier selection for asymmetric specification region: using price and quality

Abstract

Selecting a supplier is one of the most important factors in the so-called ‘Supply Chain Management’. In the present article, supplier selection problem is addressed particularly for multivariate processes, i.e. processes having two or more correlated characteristics, with asymmetric specification region. Quality and price play two major roles in selecting suppliers, so does price. In this context, apart from price and quality, some other major criteria for supplier selection are service level agreement (SLA), proximity to the manufacturing facilities, sustainability initiatives and so on (refer Taherdoost and Brard in Proc Manuf 32:1027–1034, 2019). Unfortunately, very little research is available in literature, handling quality and price simultaneously, while dealing with supplier selection. In this article, at first, a multivariate process capability index (MPCI) based approach is adopted using the conventional phase wise hypothesis testing procedure. Next, a graphical representation, called multivariate capability-price comparison (MCPC) chart is proposed, which can accommodate both the quality and price constraints, making the selection of supplier more rational. A real life example has been discussed to supplement the theory developed in this article.

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Acknowledgements

The author is extremely thankful to the learned reviewers for their valuable comments and constructive suggestions in improving the quality of the paper.

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Correspondence to Moutushi Chatterjee.

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Chatterjee, M. Multivariate supplier selection for asymmetric specification region: using price and quality. Ann Oper Res (2022). https://doi.org/10.1007/s10479-022-04678-4

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Keywords

  • Supply chain management
  • Asymmetric specification
  • Multivariate quality control
  • Price
  • Process capability
  • Quality-price chart
  • Testing of hypothesis