Designing an Applied Approach to Support Supplier Development Decisions in Buyer-Supplier Relationship Management

Abstract

In this paper, inspired by a real case study, a hierarchical approach is presented for supplier development and supporting its critical decisions in each stage. Supplies needing development and their eligible suppliers for development are first identified using the best-worst multi-criteria decision-making method. The related decision criteria are selected based on the literature review and subjective opinions of procurement experts. Finally, a bi-objective mathematical model is proposed for selecting and allocating candidate development plans to each candidate supplier. The objectives of the proposed model include maximizing the degree of achievement of the development goals of the buyer and maximizing the net present value of the development plans’ portfolio (i.e. the selected development plans for eligible suppliers). The computational results and derived managerial insights demonstrate the effectiveness and applicability of the proposed approach and its ability to support supplier development decisions for the buyer.

Keywords

• supplier development
• multi-attribute decision making
• multi-objective programming
• best-worst method
• supplier relationship management