Multicriteria decision model for outsourcing contracts selection based on utility function and ELECTRE method

An outsourcing contract problem has been analyzed. This is a typical problem when dealing with outsourcing vendor selection. For each alternative of an outsourcing contract there is an evaluation of both cost and quality of service. The latter may include probabilistic delivery time and confidence in quality commitment. The decision-maker takes into account multicriteria evaluation through ELECTRE method. Besides, each criterion is evaluated through a utility function. The model integrates both approaches to indicate a contract proposal. This paper presents the formulation for the decision model and a numerical application to illustrate the use of the model.

[1]  Riccardo Dulmin,et al.  Supplier selection using a multi-criteria decision aid method , 2003 .

[2]  Adiel Teixeira de Almeida,et al.  Multicriteria decision making on maintenance: Spares and contracts planning , 2001, Eur. J. Oper. Res..

[3]  H. Brachinger,et al.  Decision analysis , 1997 .

[4]  David C. Croson,et al.  Agent learning in supplier selection models , 2005, Decis. Support Syst..

[5]  Bertrand Mareschal,et al.  Prométhée-Gaia: une méthodologie d'aide à la décision en présence de critères multiples , 2002 .

[6]  Theodor J. Stewart,et al.  Multiple Criteria Decision Analysis , 2001 .

[7]  Nigel Slack,et al.  Operations management , 1994 .

[8]  Jacques Teboul.  La dynamique qualité , 1992 .

[9]  Adiel Teixeira de Almeida,et al.  Multicriteria Modelling of Repair Contract Based on Utility and ELECTRE I Method with Dependability and Service Quality Criteria , 2005, Ann. Oper. Res..

[10]  G. Quintaliani,et al.  Management and Quality Control , 1998 .

[11]  Sridhar Narasimhan,et al.  Offshore outsourcing of software development and maintenance: A framework for issues , 1996, Inf. Manag..

[12]  Daniel R. Krause,et al.  An empirical investigation of supplier development: reactive and strategic processes , 1998 .

[13]  Jennifer L. Hartnett,et al.  Managing Quality: The Strategic and Competitive Edge , 1988 .

[14]  R. L. Keeney,et al.  Decisions with Multiple Objectives: Preferences and Value Trade-Offs , 1977, IEEE Transactions on Systems, Man, and Cybernetics.

[15]  J. Berger.  Statistical Decision Theory and Bayesian Analysis , 1988 .

[16]  Philippe Vincke,et al.  Multicriteria Decision-aid , 1993 .