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The strategic importance of vendor evaluation is well established in the purchasing literature. Several evaluation methodologies that consider multiple performance attributes have been proposed for vendor evaluation purposes. While these techniques range from scoring models that utilize prior articulation of weights to derive composite scores for vendors to advanced mathematical models, methods that incorporate the inherent variability in vendor's performance attributes have been limited. The primary reason for the lack of development of such models is due to the complexities associated with stochastic approaches. In order to more accurately evaluate the performance of vendors, it is critical to consider variability in vendor attributes. This paper is an attempt to fill this void in vendor evaluation models by presenting a chance-constrained data envelopment analysis (CCDEA) approach in the presence of multiple performance measures that are uncertain. Our paper effectively demonstrates the first application of CCDEA in the area of purchasing, in general, and vendor evaluation, in particular. The model is demonstrated by applying it to a previously reported dataset from a pharmaceutical company. Keywords: Chance-constrained programming; Non-linear programming; Purchasing; Stochastic data envelopment analysis

Purchasing cards (P-cards) have somewhat failed to deliver their promises of aggressive savings from frequent use but te market is growing at a steady 30% to 40% per year rate. Many of the companies pioneering its use have been forced to look for other providers because of lack of satisfactory results but some have realized large costs savings through frequent use and proper management of the system.

Less than one in 10 large Management Information System (MIS) projects succeeds. While the procurement process is not the only factor known to contribute to this high failure rate, it has been consistently identified as a source of difficulty. Knowing that procurement contributes to difficulty, however, is not useful if the reason it does so is not also known. This article analyzes procurement's contribution to failure, and describes the reforms needed to improve opportunities for success. The problem stems from the wide use of tender theory procurement (competitive bidding), and the invalid assumption that a specification can provide the basis for making value-oriented MIS buying decisions. In addition, tender theory procurement interacts with the MIS project environment to create an ethical hazard that makes it almost impossible to succeed. The reforms needed to overcome these problems are substantial. They require that tender theory be set aside and replaced by partnering-oriented procurement methods., INTRODUCTION In 1992, the United States General Accounting Office (GAO) reviewed Management Information Systems (MIS) projects and concluded: Developing and modernizing government information systems is a difficult and complex process. [...]

Four case studies concerning supplier-driven design, development and production functions are discussed. They describe several approaches to procurement and design management currently practiced by British Rail, Netherlands Railways, Rolls Royce and British Coal. In addition, they indicate that the best way to manage devolved design is to take into account an organization's position in the supply chain and its ability to handle change.

Probably. CPCs are low-risk, low-cost tools that can dramatically improve the goods acquisition process now. In late 1993, ITT Automotive launched a corporate procurement card (CPC) program so employees could [...]

IN BRIEF What jobs will exist in a typical firm's purchasing function in the future? The predictions include the following: The absolute number of jobs within purchasing, will decrease, as [...]

An increasing number of firms are employing industrial purchasing partnerships to enhance their competitiveness in the market. Programs such as total quality management and just-in-time inventory systems are integrated into purchasing partnerships to upgrade the management, distribution and quality of products. The benefits of employing such a marketing technique include greater business stability, higher customer satisfaction, better relationship between supplier and buyer and greater profits for the firm.

Purchasing professionals play essential roles in the purchasing decision-making process, coordinating and guiding all buying team members to achieve the best performance of the group as a whole. This research project examines ten key purchasing performance measures as viewed by three types of players in the purchasing decision-making process--namely, purchasing mangers, buyers, and internal customers. A key finding of the study is that the quality of purchased items presently is viewed as the most important measure, and that it should continue to be the most important measure for evaluating purchasing performance in the 1990s. It was also discovered that purchasing managers, buyers, and their internal customers hold different opinions about the measures of on-time delivery, PO cycle time, accuracy, and professionalism. The purchasing function should evaluate the differences between the three groups with regard to these performance measures in order to effect continuous improvement and the implementation of effective, consistent purchasing strategies. Practicing managers, regardless of the function in which they work, can acquire some useful and practical insights from this study by examining the weights assigned to the ten key purchasing performance measures. The views obtained from those participating in this study are very likely applicable in other environments as well. The last section of the study provides data that can be used in a computer program to evaluate purchasing performance., INTRODUCTION Measuring purchasing performance is essential for effective management and continued improvement of the purchasing function. Purchasing evaluation provides vital feedback to the purchasing department as well as to top [...]

The discounted cash flow (DCF) technique is an efficient tool for evaluating equipment purchases owing to its ability to assess whether life-time cash savings generated by continued equipment utilization can cover its acquisition costs. The DCF method follows a five-step process to calculate a net present value, which looks at the expected life of an equipment, annual cash inflow and savings over the expected life, acquisition costs, annual cash costs over the expected life and cost of capital. Using the cost of capital as the discount rate, the net cash flows' present values can be calculated and added up to yield the net present value., The discounted cash flow technique can help you determine whether the purchase of specific new equipment makes sense financially. THE DISCOUNTED cash flow (DCF) technique is a useful method for [...]

A study of purchasing in manufacturing shows that some dramatic shifts have occurred in the people and procedures of purchasing in U.S. industry. Those changes have affected the metalcasting industry [...]

How Multidimensional Is the Purchasing Job? This article examines the issue of how multidimensional the buying job actually is. The results of a study of firms in five industries is [...]

Despite numerous campaigns, few communities encourage their procurement agents to buy recycled products on a regular basis. Ironically, municipalities can benefit more than most organizations from a buy recycled policy, [...]

Byline: JACK NEFF As marketers squeeze every ounce of fat out of budgets, agency executives are decrying the power of procurement executives, fearing that as the discipline grows, marketingalready struggling [...]

By Susan Avery, Senior Editor, Purchasing Distributors are Providing Purchasing with More Goods and Services than Ever Before. But, for Buyers, it is Still not Enough, According to a New [...]

The other day, a long-standing client came into my office seeking help. He had finally decided to heed some advice I had preached for years: 'Before making any major expenditures, [...]

By Bill Michels Remember the time when someone in the company who wanted to buy something would have to 'go through purchasing?' It was as though the department was a [...]

By Paul Teague | editor in chief Last month, I spoke at the 2008 International Forum on Design For Manufacturing and Assembly (DFMA). Sponsored by Boothroyd Dewhurst, it was a [...]

By Maria Varmazis If there's one thing that gets IT managers really aggravated about technology procurement, it's being left out of the picture. Often enough buyers realize that major technology [...]

By Paul E. Teague Increasingly, corporate executives are asking purchasing staffs to take over the procurement of services as well as direct materials. And the primary goal isn't always to [...]

Staff The National Association of Purchasing & Payables has announced that Chris Connors, director of procurement strategy and planning, Hewlett-Packard, will deliver the keynote address at its annual conference February [...]

The influence of purchasing strategies on the organization's performance in terms of its shareholder value is not a well-known fact. Purchasing strategies like cooperative negotiations, long-term relationships, sharing of strategic information with the suppliers, maintaining minimum supplier base, which help in effective and efficient organizational performance, are discussed.

Uniloc PC Preload Inc. (Huntington Beach, CA) is launching its own try-before-you-buy software delivery approach with its TITLEwave program. One advantage of the program is that it works within the [...]

Industrial purchasing professionals want suppliers to improve delivery performance, better understand their customer's business, offer alternative solutions, help them manage inventories, communicate better, solve problems as they arise, and generally [...]

Look Outwards. How does your support organization interact with and relate to other customer interaction points in your firm? How does the support technology you are looking at fit in [...]

Q: With the arrival of spring, what steps should propane retailers take to assess their operational needs and determine when to buy needed equipment? E: Equipment purchases, like any capital [...]

PUBLISHERS ARE SCRAMBLING to offer the fully 'integrated package' including print, online, events, lead generation and data to name just a few. But how to effectively position those offerings in [...]

If your computer's monitor is hogging the top of your desk, you can reclaim much of the space by replacing it with a liquid-crystal display (LCD). But doing so will [...]

Caveat Emptor--the Latin phrase for 'Let the Buyer Beware'--has been the orientation of laws governing trade in English-speaking Western countries for centuries. That is, buyers of goods bear the bulk [...]

The rapid pace of innovation in printing technology has made it difficult for businesses to find an appropriate type of printer for their purposes. To make sure that purchase is successful, managers should follow certain guidelines. These include ascertaining the volume of printing the company requires as well as the number of individuals who will most likely use the printer. Managers should also identify first the software requirements of the business. It may also be necessary to find out if color is needed. Printers should also be assessed on their compatability with the fax/modem/notebook and other peripherals of the company. Whether memory can be added to the printer in the future is another worthy consideration. The type of paper that will be used is another factor that should be addressed in buying a printer. Other elements include the brand, purchase price and running costs.