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Supplier Evaluation Through Data Envelopment Analysis

Journal of Supply Chain Management Systems

Volume 1 Issue 2

Published: 2012
Author(s) Name: K. G. Durga Prasad, K.Venkata Subbaiah, Ch. Venu Gopala Rao, K.Narayana Rao
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Abstract

In this paper, a methodology is proposed for evaluating the efficiency and performance of the suppliers through Data Envelopment Analysis (DEA) technique. DEA is a multifactor productivity technique to measure the relative efficiency of the decision making units. Super Efficiency and Cross Efficiency methods are employed in this work to determine the efficiencies and the performance scores of the suppliers respectively. A numerical illustration is presented to demonstrate the proposed methodology. Twenty three suppliers are considered in the study. Each supplier has six inputs and five outputs. On the basis of super efficiency and cross efficiency scores, the suppliers are classified into different clusters. The suppliers’ performance – efficiency score grid is developed, which helps the management to take effective decision in the selection of the suppliers of a company.

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