Single or multiple sourcing strategy: A mathematical model for decision making in the hospital sector

Abstract

In the hospital sector, simply looking for suppliers offering the lowest prices is not “efficient sourcing” any more. They undertake a thorough reflection on the procurement strategy to follow with various suppliers, of medicines and medical equipments. There is often a tussle between choosing a right sourcing strategy which says, whether the hospital should go for single or multiple sourcing. In this context we propose a mathematical model for supplier's selection problem by taking into account three criteria to optimize. The objective of the proposed model is to make a comparison between numerical results, obtained as a solution, for multiple criteria supplier selection problem. This model is developed to help making decision, to either one vendor (single sourcing), or many vendors (multiple sourcing). And then a comparison is made between their performances in terms of the domains in which each mode excels.