Considering Product Life Cycle Cost Purchasing Strategy for Solving Vendor Selection Problems

Abstract

The framework of product life cycle (PLC) cost analysis is one of the most important evaluation tools for a contemporary high-tech company in an increasingly competitive market environment. The PLC-purchasing strategy provides the framework for a procurement plan and examines the sourcing strategy of a firm. The marketing literature emphasizes that ongoing technological change and shortened life cycles are important elements in commercial organizations. From a strategic viewpoint, the vendor has an important position between supplier, buyer and manufacturer. The buyer seeks to procure the products from a set of vendors to take advantage of economies of scale and to exploit opportunities for strategic relationships. However, previous studies have seldom considered vendor selection (VS) based on PLC cost (VSPLCC) analysis. The purpose of this paper is to solve the VSPLCC problems considering the situation of a single buyer–multiple supplier. For this issue, a new VSPLCC procurement model and solution procedure are derived in this paper to minimize net cost, rejection rate, late delivery and PLC cost subject to vendor capacities and budget constraints. Moreover, a real case in Taiwan is provided to show how to solve the VSPLCC procurement problem.

Using a Product Life Cycle Cost Model to Solve Supplier Selection Problems in a Sustainable, Resilient Supply Chain

“…Members of the team convened multiple sessions to develop profiles for competing providers and assembled a preliminary list of three companies for evaluation purposes [21]. The management is concerned with improving the efficiency of the purchasing process and optimizing the company's sourcing strategies.…”

“…To solve the SCPLCC problem, we modified a sample data set of auto part manufacturers from a study by Kumar et al [20]. For sustainable buying, we used real-world data from LED companies [21].…”

Using a Product Life Cycle Cost Model to Solve Supplier Selection Problems in Sustainable Supply Chain

“…Our SCPLCC model can help DMs determine the appropriate prioritization of suppler and allow purchasing managers to manage SC performance on the basis of minimizing net cost, rejection, late delivery, and PLCC goals. Our study main contribution Company managers can easily use the two approaches of the SCPLCC model with different parameters to solve SCPLCC model problems [10]. The paper is organized as follows: First, we review the literature on the quantitative techniques of the SC decision in Section 2.…”