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A Decision-Making Model for Supplier Selection Based on Data Envelopment Analysis
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Hoda Moradi   , Mehdi Abbaszadeh |
| Department of Management, Yazd Branch, Islamic Azad University, Yazd, Iran, Email: , h.moradi@iauyazd.ac.ir |
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Abstract: (349 Views) |
Efficiency plays a pivotal role in impacting costs and optimizing resource utilization for
businesses. This study aims to evaluate the technical and scale efficiency of 15 suppliers within
a production unit over a three-year period (2020-2022) using data envelopment analysis
(DEA). The analysis will involve assessing efficiency under two assumptions - constant returns
to scale and variable returns to scale. Variables were selected based on indicator availability,
representation principles, and expert input, with inputs including investment, nonoperating
expense costs, and operational expenses (comprising raw material costs, wages, and
overheads), while outputs encompass net sales and return on investment. Results from the study
indicated that supplier one, scoring 0.5716 assuming constant returns to scale and 0.6790
under variable returns to scale, emerged as the least efficient supplier. Interestingly, only two
suppliers (8 and 15) demonstrated higher efficiency levels. However, the net technical efficiency
of the supply chain showed an increasing concentration, which indicates the overall reduction
of the gap between suppliers and the improvement of the net technical efficiency in the supply
chain of the production unit. This study provides valuable insights into the differences between
suppliers from a macro perspective and offers guidance for manufacturing units looking to
expand their supply chain. |
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| Keywords: Data Envelopment Analysis, Supply Chain, return to scale, efficiency. |
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Full-Text [PDF 364 kb]
(431 Downloads)
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Type of Study: Original |
Subject:
Supply Chain Management and Logistics
Received: 2024/04/19 | Accepted: 2024/06/3 | Published: 2024/07/23
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