A practical expected-value-approach model to assess the relevant procurement costs

Ching Ter Chang, Yan Yu Chou, Zheng Yun Zhuang

Research output: Contribution to journalArticle

7 Citations (Scopus)

Abstract

As an improvement to a series of expected value approach models, this study presents a supplier portfolio decision model, rather than a number of suppliers decision model. The model assesses risks as costs, considers types of heterogeneity in a procurement process and links the assessed terms in the programming model with accounting concepts. The model is then confirmed by using a procurement decision case with real data. The analysis has several implications for modelling, application and practice. In the light of the counterexamples shown, some thoughts pertaining to procurement decisions in supply management are reconsidered.

Original languageEnglish
Pages (from-to)539-553
Number of pages15
JournalJournal of the Operational Research Society
Volume66
Issue number4
DOIs
Publication statusPublished - Apr 12 2015
Externally publishedYes

Keywords

  • accounting
  • optimization
  • purchase
  • risk

ASJC Scopus subject areas

  • Management Science and Operations Research
  • Management Information Systems
  • Marketing
  • Strategy and Management

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