A novel formulation of the DEA model for application to supplier selection

The paper deals with a key objective of the strategic purchasing function in supply chain management, namely vendor evaluation and selection. We propose a novel formulation of the so-called Data Envelopment Analysis (DEA) technique that overcomes some known drawbacks of DEA in the application to supplier selection in the enterprise integration, New constraints are introduced in the DEA method in order to better mimic the buyer behavior. We call the resulting approach DEA-P (DEA Percentage) because it allows the decision maker to compare the different supplier evaluation criteria by assigning a percentage index expressing the importance of each criterion. A simulated case study demonstrates the effectiveness of the novel method for supplier selection optimization. This work was supported by the Cassa di Risparmio di Puglia Foundation.