Supplier selection requires full transparency

Jan Telgen, Fredo Schotanus

Research output: Contribution to conferencePaperAcademic

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Abstract

In this paper, we highlight a number of problems arising with a commonly used supplier selection method: the weighted factor score method. We discuss the behavior of this method with respect to weighting, scaling issues, and relative scoring. Assuming that there is no convex dominance, we formally prove that with the same supplier selection method, we can make any supplier win by judiciously choosing the right parameters of the awarding mechanism. This means that any supplier can win if certain parameters are not published in a request for a proposal. This result applies to both absolute and relative scoring methods. Also, we show that the buyer should fully disclose all details of the awarding mechanism to suppliers in order to get better bids. The practical implications of our results are far reaching for (public) procurement: full transparency and disclosure of all details of weights and awarding schemes is not only required to avoid subjectivity in supplier selection, but it also leads to better bids from suppliers.
Original languageUndefined
Publication statusPublished - 2010
Event19th Annual IPSERA Conference 2010: Supply management - missing link in strategic management? - Lapeenranta, Finland
Duration: 16 May 201019 May 2010
Conference number: 19

Conference

Conference19th Annual IPSERA Conference 2010
CountryFinland
CityLapeenranta
Period16/05/1019/05/10

Keywords

  • IR-74073

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