A data envelopment analysis approach based on the service qualtiy concept for vendor selection

A basic part of the logistics management in companies is the purchasing function, and the appropriate selection of vendors is one of the prime responsibilities of this function. Many conceptual and analytical models have been developed for addressing the vendor selection problem. While it has been recognized that vendor selection is multi-objective in nature, litle has been done to develop techniques for measuring vendors' performance on multiple criteria. Thus, this paper presents an approach for evaluating vendors in order to select the most proper one in a procurement situation. The approach uses data envelopment analysis to evaluate the vendors' efficiency. The criteria considered in this model are service quality, price, delivery and rate of rejected parts. The findings prove that the traditional supplier evaluation and selection methods are inefficient and the vendors who provide the best service quality are not necessarily efficient.