The most cost efficient automotive vendor with price uncertainty: A new DEA approach

Mehdi Toloo*, Tijen Ertay

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

27 Citations (Scopus)

Abstract

Vendor's performance evaluation is an important subject which has strategic implications for managing an efficient company. However, there are many important criteria for prospering company. These criteria may contradict together. In other words, while a criterion is improved, the other may worsen. Indeed, similar to manufacturing manager in global market, purchasing manager who has significant practical implications deals with this issue. The vendor selection problem (VSP) is obviously affected by the complexity and uncertainty due to the lack of information associated with related business environment of countries in a global market. On the other hand, in the automotive industry which plays an important role in the worldwide market, these decisions will be exacerbated by increasing the outsourcing and opportunities. There are varieties of techniques, from simple weighted scoring methods to complex mathematical programming, for handling VSP. In this study, we propose a new cost efficiency data envelopment analysis (CE-DEA) approach with price uncertainty for finding the most cost efficient unit. Potential uses are then illustrated with an application to automotive industry involving 73 vendors in Turkey.

Original languageEnglish
Pages (from-to)135-144
Number of pages10
JournalMeasurement: Journal of the International Measurement Confederation
Volume52
Issue number1
DOIs
Publication statusPublished - Jun 2014
Externally publishedYes

Keywords

  • Automotive industry
  • Cost efficiency
  • Data envelopment analysis
  • Price uncertainty
  • Vendor selection

ASJC Scopus subject areas

  • Instrumentation
  • Electrical and Electronic Engineering

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