Bootstrap approach for supplier selection based on production yield

Abstract

Current manufacturing industries have increased their level of out-sourcing and relied more heavily on their supply chain as a source of competitive advantage. Supplier selection decisions have become an important component of production management. Those decisions have a significant impact on a firm's marketing competition, and suppliers may account for a large portion of the production cost. Production quality is one of the key factors in supplier evaluation. The manual of supplier certification includes a discussion of process capability analysis, which recommends a procedure for evaluating the most prevalent process capability index C pk . However, the recommended procedure is applicable only when evaluating an individual supplier's performance. In this paper, we apply the bootstrap method to the supplier selection problem. We construct lower confidence intervals for the capability difference and ratio between two given suppliers. Performance comparisons are made among various bootstrap methods in terms of error probability and selection power. For convenience of applications, the sample sizes required for various designated selection power are also tabulated.

Power analysis for group supplier selection with multiple production lines

“…A lot of research works have been presented some critical criteria, involving quality, price, service, and delivery reliability, for supplier selection from several available candidates (see Tracey and Tan and Wu et al). Ho et al pointed out that the most popular criterion used for evaluating the performance of suppliers is quality criteria instead of cost for supplier evaluation and selection because incapable items would incur extra material costs or even delay delivery.…”

Taxonomy and review of non-deterministic analytical methods for supplier selection

“…Chen and Chen (2006), Wu et al (2008), Pearn and Wu (2013), Wu, Liao, and Yang (2013), Wu, Pearn, and Chuang (2013) • An effective and convenient tool for evaluating quality performance. • Provides a numerical and unitless measure of whether a process can produce the required quality specified by the product designer.…”

Multiple Comparisons with the Best for Supplier Selection

“…The yield‐related PCIs other than the S pk index were also investigated for comparing two suppliers or processes (Daniels et al ,. Wu et al ,. Pearn and Wu).…”

“…Based on normal approximation, Lin and Pearn 6 and Wu et al 7 applied a ratio-based test statistic and a generalized confidence interval to compare two production yields, respectively. The yield-related PCIs other than the S pk index were also investigated for comparing two suppliers or processes (Daniels et al 8 , Wu et al 9 , Pearn and Wu 10 ).…”