Abstract:

Supplier selection is a critical decision process in a company. Since, gaining a competitive advantage is a great challenge in today’s economy; firms need a well-managed supply chain to compete in these circumstances. Supply chain is an integrated system in which individual companies perform interdependent activities. Therefore, the success of a supply chain is highly dependent on establishing a longer-term working relationship among members of the supply chain community. Supplier selection process is a multi-criteria problem which includes different attributes such as quality, delivery, price, supply variety, distance etc. In our study, we consider two major criteria price and quality together with using incapability index Cpp and price advantage chart in order to evaluate supplier performance. In this paper a case study of the pharmaceutical industry is illustrated. The results obtained in this study show that capability and price advantage chart is useful to the practitioners in choosing the best supplier.

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