Multi-Tier Supplier Selection Using Total Cost of Ownership and Data Envelopment Analysis

2020 ◽  
pp. 597-622
Author(s):  
Feras Saleh
Keyword(s):  
Data Envelopment Analysis ◽  
Quality Management ◽  
Supply Chains ◽  
Supplier Selection ◽  
Global Supply Chains ◽  
Data Envelopment ◽  
Total Cost Of Ownership ◽  
Network Dea ◽  
Total Cost ◽  
Cost Of Ownership

Quality management across multiple tiers is vital to minimize cost of quality in global supply chains. In this chapter, the authors address the problem of supplier selection in multi-tier global supply chains with the purpose of overall quality management. A hybrid approach based on total cost of ownership (TCO) and network data envelopment analysis (DEA) is proposed. The TCO looks beyond the quoted cost to cover additional true costs related to the entire purchasing cycle. The cost categories included are quoted price, manufacturing costs, quality costs, design costs, logistics costs, after sales service, and social/environmental costs. Network DEA is used to rank the suppliers based on the TCO cost categories. The advantage of network DEA is its ability to investigate intermediate linkages between different stages of the supply chain. The results of network DEA are efficient suppliers and improvement targets for inefficient suppliers for improving overall quality in global supply chains. A numerical application is provided.

scholarly journals Supplier’s total cost of ownership evaluation: a data envelopment analysis approach

Omega ◽  
2016 ◽  
Vol 61 ◽  
pp. 141-154 ◽  
Author(s):  
Franco Visani ◽  
Paolo Barbieri ◽  
F. Marta L. Di Lascio ◽  
Anna Raffoni ◽  
Daniele Vigo
Keyword(s):  
Data Envelopment Analysis ◽  
Analysis Approach ◽  
Data Envelopment ◽  
Total Cost Of Ownership ◽  
Total Cost ◽  
Cost Of Ownership

scholarly journals The Impact of Using the Total Cost of Ownership (TCO) Account for a Reusable Wooden Flat Pallet in Its Operational Phase on Respecting the Principles of Sustainable Development

Resources ◽  
2021 ◽  
Vol 10 (11) ◽  
pp. 116
Author(s):  
Mariusz Jedliński ◽  
Mariusz Sowa
Keyword(s):  
Sustainable Development ◽  
Supply Chains ◽  
Essential Element ◽  
Basic Research ◽  
Primary Data ◽  
Total Cost Of Ownership ◽  
Total Cost ◽  
Cost Of Ownership ◽  
Operational Life ◽  
The Impact

Despite the commonly observed trend towards mechanization and automation of operational processes, the potential benefits of wooden pallets as an essential element of the infrastructure of logistic processes are often overlooked in considerations related to sustainable development. Aspects that are mentioned more often include the very idea of the economy itself (circular economy), characteristics of logistics (green), features of the supply chain itself (sustainable) or expectations towards transport (ecological). The authors believe that the idea of total cost of ownership (TCO) in relation to wooden pallets can be a key component of holistic thinking in terms of sustainable development. In a situation where in relation to logistics, reasonable expectations for developing sustainable supply chains are made, paying attention to such a common logistic facility, namely a cargo pallet, which is given so little attention in research, is, in the opinion of the authors, absolutely justified. Therefore, the article presents an original approach to the problem of aggregation of all costs that cargo pallets generate in their operational life cycle, using the total cost of ownership (TCO) analysis methodology. The main goal of the article, however, is to show that the total cost of ownership of a pallet (not only owning it) can become an effective tool used to significantly reduce the costs of logistic activity of enterprises (as well as whole supply chains) and support the idea of sustainable development in practice. Using the primary data from questionnaire research, the focus was on considerations that were of identification character (cognitive and explanatory considerations), which are typical for basic research that aims to explain given phenomena. Thus, the presented cognitive process covers two main areas, namely: the general theory of sustainable development and the specificity of wooden pallets as carriers used in goods trading in terms of their total costs of ownership.

Innovative Distribution Company: A Total Cost Approach to Understanding Supply Chain Risk

2018 ◽  
pp. 1-9
Author(s):  
Ted Farris ◽  
Ila Manuj
Keyword(s):  
Supply Chains ◽  
Economic Order Quantity ◽  
Purchase Price ◽  
Order Quantity ◽  
Supply Chain Risk ◽  
Total Cost Of Ownership ◽  
Safety Stock ◽  
Total Cost ◽  
Cost Of Ownership ◽  
Distribution Company

This case illustrates the use of the total cost of ownership concept to analyse and compare two supply chains – one international and one domestic. The case provides an opportunity to calculate economic order quantity and safety stock quantities and then combine purchase price, shipping costs, and inventory carrying costs to quantify the differences between the two supply chains.

Sign in / Sign up

Export Citation Format

Share Document