- Log In/Sign Up
- P-ISSN1738-3110
- E-ISSN2093-7717
- SCOPUS, ESCI
ISSN : 1738-3110
Optimization-Based Buyer-Supplier Price Negotiation: Supporting Buyer’s Scenarios with Suppler Selection
Jeon, Dong-Han
Seo, Yong-Won
Abstract
Purpose - The paper aims to propose an optimization model for supporting the buyer-seller negotiations. We consider the price, quality, and delivery as evaluation criteria, also recognized as objectives for negotiation. Research design, data, and methodology - The methodology used in this paper involves the input-oriented DEA with the inverse optimization. Under the existence of several potential suppliers, the price would be considered to be the decision variable to conclude the negotiation so as to meet the desired level of the quality and delivery. The data set for six suppliers with three criteria is examined by the proposed approach. Results - We present the decision aid model by displaying the price spectrum as the changes of desired output levels. It overcomes the shortcomings from previous researches mainly based on the discrete types of scenario generations. This approach shows that the obtained results help the buyer understand the trade-offs between price and performance when he/she considers the negotiation. Conclusions - The paper contributes to the numerical models for buyer-supplier negotiation in that the model for the supplier evaluation and selection is closely linked with the model for negotiation. In addition, it eliminates the unrealistic negotiation strategy, and provides the negotiation strategies that the buyer would not shift the burden on suppliers by maintaining the current efficiency.
- keywords
- Supplier Selection, Buyer-supplier Negotiation, Inverse Optimization, Data Envelopment Analysis
Reference
Aksoy, A., & Ozturk, N. (2011). Supplier selection and performance evaluation in just-in-time production environments. Expert Systems with Applications, 38, 6351-6359.
Amid, A., Ghodsypour, S. H., & O’Brien, C. (2009). A weighted additive fuzzy multiobjective model for the supplier selection problem under price breaks in a supply chain. International Journal of Production Economics, 121(2), 323-332.
Amin, S. H., & Zhang, G. (2012). An integrated model for closed-loop supply chain configuration and supplier selection: Multi-objective approach. Expert Systems with Applications, 39(8), 6782-6791.
Bragli, M., & Petroni, A. (2000). A quality assuranceoriented methodology for handling trade-offs in supplier selection. International Journal of Physical Distribution and Logistics Management, 30(2), 96-111.
Browning, J. M. (1990). Purchasing and Materials Management: Text and Cases. Journal of Purchasing & Materials Management, 26(3), 42-44.
Chai, J., Liu, J. N., & Ngai, E. W. (2013). Application of decision-making techniques in supplier selection: A systematic review of literature. Expert Systems with Applications, 40(10), 3872-3885.
Cooper, W. W., Seiford, L. M., & Tone, K. (2006). Introduction to data envelopment analysis and its uses: with DEA-solver software and references. New York: Springer Science & Business Media,
Degraeve, Z., Labro, E., & Roodhooft, F. (2000). An evaluation of vendor selection models from a total cost of ownership perspective. European Journal of Operational Research, 125(1), 34-58.
De Boer, L., Labro, E., & Morlacchi, P. (2001). A review of methods supporting supplier selection. European journal of purchasing & supply management, 7(2), 75-89.
Dobler, D. W., Lee, L. J., & Burt, D. (1984). Purchasing and materials management: Text and cases. New York: McGraw-Hill.
Dobler, D. W., & Burt, D. N. (1996). Purchasing and supply management: text and cases (6th ed.). New York: McGraw-Hill.
Falagario, M., Sciancalepore, F., Costantino, N., & Pietroforte, R. (2012). Using a DEA-cross efficiency approach in public procurement tenders. European Journal of Operational Research, 218(2), 523-529.
Golmohammadi, D. (2011). Neural network application for fuzzy multi-criteria decision making problems. International Journal of Production Economics, 131, 490-504.
Govindan, K., Diabat, A., & Popiuc, M. N. (2012). Contract analysis: A performance measures and profit evaluation within two-echelon supply chains. Computers & Industrial Engineering, 63(1), 58-74.
Hadi-Vencheh, A., Foroughi, A. A., & Soleimani-damaneh, M. (2008). A DEA model for resource allocation. Economic Modelling, 25(5), 983-993.
Ho, W., Xu, X., & Dey, P. K. (2010). Multi-criteria decision making approaches for supplier evaluation and selection: A literature review. European Journal of operational research, 202(1), 16-24.
Jadidi, O. M. I. D., Zolfaghari, S., & Cavalieri, S. (2014). A new normalized goal programming model for multi-objective problems: A case of supplier selection and order allocation. International Journal of Production Economics, 148, 158-165.
Jahanshahloo, G. R., Soleimani-Damaneh, M., & Ghobadi, S. (2015). Inverse DEA under inter-temporal dependence using multiple-objective programming. European Journal of Operational Research, 240(2), 447-456.
Li, G. D., Yamaguchi, D., & Nagai., M. (2008). A greybased rough decision-making approach to supplier selection. International Journal of Advanced Manufacturing Technology, 36, 1032-1040.
Lim, D. J. (2016). Inverse DEA with frontier changes for new product target setting. European Journal of Operational Research, 254(2), 510-516.
Liu, J., Ding. F. Y., & Lall, V. (2000). Using data envelopment analysis to compare suppliers for supplier selection and performance improvement. International Journal of Supply Chain Management, 5(3), 143-150.
Pan, A., & Choi, T. M. (2016). An agent-based negotiation model on price and delivery date in a fashion supply chain. Annals of Operations Research, 242(2), 529-557.
Rosato, A. (2017). Sequential negotiations with loss-averse buyers. European Economic Review, 91, 290-304.
Saen, R. F. (2007). Suppliers selection in the presence of both cardinal and ordinal data. European Journal of Operational Research, 183(2), 741-747.
Saen, R. F. (2008). Supplier selection by the new AR-IDEA model. The International Journal of Advanced Manufacturing Technology, 39(11), 1061-1070.
Talluri, S. (2002). A buyer-seller game model for selection and negotiation of purchasing bids. European Journal of Operational Research, 143(1), 171-180.
Talluri, S., & Sarkis, J. (2002). A model for performance monitoring of suppliers. International Journal of Production Research, 40(16), 4257-4269.
Talluri, S., Narasimhan R., & Nair, A. (2006). Vendor performance with supply risk: a chance constrained DEA approach. International Journal of Production Economics, 100(2), 212-222.
Talluri, S., Vickery, S. K., & Narayanan, S. (2008). Optimization models for buyer-supplier negotiations. International Journal of Physical Distribution &Logistics Management, 38(7), 551-561.
Weber, C. A., Current, J. R., & Benton, W. C. (1991). Vendor selection criteria and methods. European journal of operational research, 50(1), 2-18.
Weber, C. A., Current, J. R., & Desai, A. (1998). Non-cooperative negotiation strategies for vendor selection. European Journal of Operational Research, 108(1), 208-223.
Weber, C. A., Current, J., R., & Desai, A. (2000). An optimization approach to determining the number of vendors to employ. International Journal of Supply Chain Management, 5(2), 90-98.
Weber, C. A. (1996). A data envelopment analysis approach to measuring vendor performance. Supply Chain Management: An International Journal, 1(1), 28-39.
Weber, C. A., & Desai, A. (1996). Determination of paths to vendor market efficiency using parallel coordinates representation: a negotiation tool for buyers. European Journal of Operational Research, 90(1), 142-155.
Wei, Q., Zhang, J., & Zhang, X. (2000). An inverse DEA model for inputs/outputs estimate. European Journal of Operational Research, 121(1), 151-163.
Zhang, X. S., & Cui, J. C. (1999). A project evaluation system in the state economic information system of china an operations research practice in public sectors. International Transactions in Operational Research, 6(5), 441-452.
Zheng, S., & Negenborn, R. R. (2015). Price negotiation between supplier and buyer under uncertainty with fixed demand and elastic demand. International Journal of Production Economics, 167, 35-44.
Zhu, J. (2004). A buyer-seller game model for selection and negotiation of purchasing bids:extensions and new models. European Journal of Operational Research, 154(1), 150-156.
- Downloaded
- Viewed
- 0KCI Citations
- 0WOS Citations