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Selecting a supplier portfolio with value, development, and risk consideration

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  • Hosseininasab, Amin
  • Ahmadi, Abbas

Abstract

This paper introduces a novel two-phase supplier selection procedure. Unlike most supplier selection researches, which are decisive based on supplier eligibility at the time of the decision making, the proposed method is based on the long term trend of value, stability, and relationship of potential suppliers. In the first phase, suppliers are evaluated and assigned a comparable value based on a set of criteria. This value is then analyzed in the long run, and fed into a multi-objective portfolio optimization model in the second phase. The model determines a supplier portfolio by maximizing the expected value and development of suppliers, and minimizing their correlated risk. The novelty of this procedure is introducing a new view toward the supplier selection problem. Numerical tests show that the proposed approach selects higher value suppliers with lower risk of failure, compared to available methods.

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  • Hosseininasab, Amin & Ahmadi, Abbas, 2015. "Selecting a supplier portfolio with value, development, and risk consideration," European Journal of Operational Research, Elsevier, vol. 245(1), pages 146-156.
    • Handle: RePEc:eee:ejores:v:245:y:2015:i:1:p:146-156
    DOI: 10.1016/j.ejor.2015.02.041
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    5. Mohammadivojdan, Roshanak & Merzifonluoglu, Yasemin & Geunes, Joseph, 2022. "Procurement portfolio planning for a newsvendor with supplier delivery uncertainty," European Journal of Operational Research, Elsevier, vol. 297(3), pages 917-929.
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    7. Golmohammadi, Amirmohsen & Taghavi, Majid & Farivar, Samira & Azad, Nader, 2018. "Three strategies for engaging a buyer in supplier development efforts," International Journal of Production Economics, Elsevier, vol. 206(C), pages 1-14.
    8. Alikhani, Reza & Torabi, S. Ali & Altay, Nezih, 2019. "Strategic supplier selection under sustainability and risk criteria," International Journal of Production Economics, Elsevier, vol. 208(C), pages 69-82.
    9. Gu, Jing & Shi, Xinyu & Wang, Peini & Xu, Xun, 2022. "Examining the impact of upstream and downstream relationship stability and concentration on firms’ financial performance," Journal of Business Research, Elsevier, vol. 141(C), pages 229-242.
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