Selecting suppliers for a long-term relationship

Abstract

The purpose of this paper is to develop a quantitative methodology based on data envelopment analysis (DEA), including the constraint of ‘self-efficiency’ for supplier selection. This paper considers not only both product and process characteristics as outputs of the suppliers but also suppliers' self-efficiency, a prerequisite for the survival of the supplier in a competitive environment. Three extensions of DEA are employed and combined for ranking and selecting among self-efficient suppliers. A real example illustrates the applicability and discriminating power of the proposed model compared to a similar study.