Determination of supply conditions, scenarios and pay-off for industrial machinery supplier selection post economic and engineering considerations

Abstract

Supply conditions after economics and engineering considerations is important for consideration because machinery and equipment procurement is a tripod of which supply conditions is one. This study identified the attributes of supply conditions, different ways of combining the attributes using simple permutation and combination theories and determined the pay-off as well as the opportunity lost to every scenario used by method of Expected Decision Value (EDV). The attributes were identified as: Due Date of the Supply (A); Technical Capability of Vendor (B); After Sales Services (C); and Vendor’s Experience (D). Total number of scenarios were 15 of four (4) options. The pay-off with the opportunity lost to each selected option are: Option1 (25% against 75%); Option2 (50% against 50%); Option3 (75% against 25%); and Option4, 100% where the four (4) strategic decisions were all considered for selecting the supplier turns out to be optimum and in favour of purchaser. Further research in the area of development of a Surrogate Model for Industrial Machinery Supplier Selection Post Economics and Engineering Considerations is recommended.