Multiple Comparisons with the Best for Supplier Selection

Abstract

Evaluating and selecting suppliers are essential tasks in managing supply chains. Quality is one of the most important factors for supplier selection among various criteria. To compare the quality of k (k ≥ 2) suppliers, this paper proposes a multiple comparisons with the best method based on the yield index, Spk. Other than the existing work that provides a subset containing the best supplier, the proposed method further gives the upper and lower bounds for each difference in Spk from the unknown best supplier at a confidence level of at least 1‐α. The supplier having a zero lower bound is identified as the best supplier with the highest yield, whereas having a positive lower bound is inferior with a lower yield. The power analysis shows that proposed method would be more and more powerful than the existing work when k gets large. The required sample sizes for certain power levels are provided. An application to comparing three suppliers of the IC drivers of the light‐emitting diode module is presented to show the effectiveness of the proposed method to a real‐world problem. Copyright © 2013 John Wiley & Sons, Ltd.