Solving Supplier Evaluation and Selection Problem by using System Dynamics Model

• Main Authors: Nguyen Thi Bich Ly, 阮氏碧璃
• Other Authors: Kung-Jeng Wang
• Format: Others
• Language: en_US
• Published: 2018
• Online Access: http://ndltd.ncl.edu.tw/handle/rq32kq

碩士 === 國立臺灣科技大學 === 工業管理系 === 106 === Since the beginning of 1990s, Taiwan has been one of the most important OEM/ODM partners partner. These firms are valuable because of their production speed, flexibility, and cost-cutting ability. But nowadays, when business environment is getting more competitive; demand is uncertain; and technology is rapidly changing, the cost-cutting ability of OEM/ODM becomes more challenging than ever. In such situation, purchasing function, which directly effecting to cost structure, product quality, and competitive ability of enterprise, becomes an essential function. So, the understanding of supplier behaviors and effect of these behaviors on firm operation becomes an indispensable tool for managers for making adequate strategic decisions on supplier evaluation and selection. This research develops a system dynamics (SD) model to (i) investigate the effects of supplier’s behavior on a firm performance and (ii) to process supplier evaluation and selection work. A simulation model is designed based on actual operation of a Taiwan ICT firm, including five internal sub-models: order demand, production control, financial planning, project management, R&D, and an external sub-model: supplier management. In order to confirm the accuracy of simulation model, structural validity tests and behavior validity test are applied. A set of design of experiment (DOE) is designed to investigate the effect of supplier factors on profit outcome. Furthermore, historical data from 18 housing material suppliers are loaded into the proposed SD model to implement the supplier evaluation and selection process. Our study also proves that the combination of the most efficient suppliers produces a higher profit, approximately 8%, comparing to simulation result of 18 suppliers.