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A Bayesian approach to service level performance monitoring in supplier, provider relationships

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  • F P Wheeler

    (University of Bradford)

Abstract

Techniques are presented for monitoring the performance of a delivery service. The techniques were developed from the practical need to support two parties: a virtual retailer that out-sources the home delivery of its goods and the logistics business that provides its courier service. The techniques are relevant to contractual negotiations and performance monitoring. A graphical tool for hypothesis testing is presented as an aid to contract negotiation and a dynamic model is developed to track performance over time for operational management. The approach is based upon the beta-binomial distribution, within a Bayesian decision context.

Suggested Citation

  • F P Wheeler, 2001. "A Bayesian approach to service level performance monitoring in supplier, provider relationships," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 52(4), pages 383-390, April.
    • Handle: RePEc:pal:jorsoc:v:52:y:2001:i:4:d:10.1057_palgrave.jors.2601096
    DOI: 10.1057/palgrave.jors.2601096
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