October  2011, 7(4): 907-925. doi: 10.3934/jimo.2011.7.907

An integrated approach for selection of service vendors in service supply chain

1. 

School of Management, Hefei University of Technology, Hefei, Anhui 230009, China, China

2. 

Jack Baskin School of Engineering, University of California, Santa Cruz, CA 94043, United States

3. 

School of Management, University of Science and Technology of China, Hefei, Anhui 230026, China

Received  October 2010 Revised  June 2011 Published  August 2011

We explore the basic conceptual framework to imagine service supply chain that is a new research concern in supply chain management, and develop an integrated approach to optimize the selection of service vendors. Three insights arise on how service vendors can be obtained: (1) exploring multiple criteria decision-making problems with incomplete weight information; (2) identifying and eliminating criteria by information entropy method; (3) analyzing and calculating the final selection of qualified service vendors through a combining way between the fuzzy analytic hierarchy process and the multi-objective linear programming approach. Finally, an experiment implemented highlights effectiveness of the integrated approach.
Citation: Fei Cheng, Shanlin Yang, Ram Akella, Xiaoting Tang. An integrated approach for selection of service vendors in service supply chain. Journal of Industrial & Management Optimization, 2011, 7 (4) : 907-925. doi: 10.3934/jimo.2011.7.907
References:
[1]

G. Allon and A. Federgruen, Competition in service industries with segmented markets,, Management Science, 55 (2003), 619. doi: 10.1287/mnsc.1080.0946.

[2]

S. H. Amin, J. Razmi and G. Zhang, Supplier selection and order allocation based on fuzzy SWOT analysis and fuzzy linear programming,, Expert Systems with Applications, ().

[3]

E. G. Anderson and D. J. Morrice, A simulation game for service-oriented supply chain management,, Production and Operations Management, (2000), 40.

[4]

L. Berry, V. Shankar and J. Parish, Creating new markets through service innovation,, MIT Sloan Management Review, 47 (2006), 56.

[5]

N. Bhuiyan, E. Shuiabi and V. Thomson, Entropy as a measure of operational flexibility,, European Journal of Operational Research, 165 (2005), 696.

[6]

O. Cakir, On the order of the preference intensities in fuzzy AHP,, Computers and Industrial Engineering, 54 (2008), 993. doi: 10.1016/j.cie.2007.11.010.

[7]

X. Chao, L. Liu and S. Zheng, Resource allocation in multisite service systems with interstice customer flows,, Management Science, 49 (2003), 1739.

[8]

R. B. Chase, The mall is my factory: Lessons from a service junkie,, Production and Operation Management, 5 (1996), 298. doi: 10.1111/j.1937-5956.1996.tb00402.x.

[9]

S. S. Chauhdry, F. G. Forst and J. L. Zydiak, Vendor selection with price breaks,, European Journal of Operational Research, 70 (1993), 52. doi: 10.1016/0377-2217(93)90232-C.

[10]

I. J. Chen and A. Paulraj, Understanding supply chain management: Critical research and a theoretical framework,, International Journal of Production Research, 42 (2004), 131.

[11]

L. H. Chen and H. W. Lu, An approximate approach for ranking fuzzy numbers based on left and right dominance,, An International Journal of Computers and Mathematics with Applications, 41 (2001), 1589.

[12]

C. H. Cheng, Evaluating naval tactical missile systems by fuzzy AHP based on the grade value of membership function,, European Journal of Operational Research, 96 (1996), 343.

[13]

S. J. Cook, Kathy DeBree and Amie Feroleto, From raw materials to customers: Supply chain management in the service industry,, SAM Advanced Management Journal, 66 (2002), 14.

[14]

K. L. Croxton, S. J. Garcia-Dastugue, D. M. Lambert and D. L. Rogers, The supply chain management process,, International Journal of Logistics Management, 12 (2001), 13.

[15]

Z. Dagraeve and F. Roodhooft, A mathematical programming approach for procurement using activity based costing,, Journal of Business Finance and Accounting, 27 (2000), 69.

[16]

H. Dernirkan and H. K. Cheng, The risk and information sharing of application services supply chain,, European Journal of Operational Research, 187 (2008), 765.

[17]

D. de Waart and S. Kemper, 5 steps to service supply chain excellence,, Supply Chain Management Review, 8 (2004), 28.

[18]

L. M. Ellram, W. L. Tate and C. Billington, Understanding and managing the service supply chain,, Journal of Supply Chain Management, (2004), 17.

[19]

J. R. Figueira, A. Liefooghe, E. G. Talbi and A. P. Wierzbicki, A parallel multiple reference point approach for multi-objective optimization,, European Journal of Operational Research, 205 (2010), 390.

[20]

G. Friezlle and J. Efstathiou, "Seminar Notes on 'Measuring Complex Systems,'", London School of Economics, (2002).

[21]

G. Galante, G. Aiello, M. Enea and E. Panascia, A parallel multiple reference point approach for multi-objective optimization,, Waste Management, 30 (2010), 1720.

[22]

M. X. He and P. E. Ricci, Information entropy of orthogonal polynomials,, Orthogonal Systems and Applications, 128 (2002), 261. doi: 10.1016/S0096-3003(01)00075-3.

[23]

S. Jharkharia and R. Shank, Selection of logistics service provider: An analytic network process (ANP) approach,, International Journal of Management Science, 35 (2007), 274.

[24]

R. Johnston, Service operations management: Return to roots,, International Journal of Operations and Production Management, 19 (1999), 104. doi: 10.1108/01443579910247383.

[25]

H. Y. Kang and A. H. I. Lee, Priority mix planning for semiconductor fabrication by fuzzy AHP ranking,, Expert Systems with Applications, 32 (2007), 560.

[26]

A. Kaufmann and M. M. Gupta, "Introduction to Fuzzy Arithmetic,", Theory and Applications, (1991).

[27]

M. Kumar, P. Vart and P. Shankar, A fuzzy goal programming approach for supplier selection problem in a supply chain,, Computer and Industrial Engineering, 46 (2004), 69.

[28]

S. Lai, G. Mayer-Kress, J. J. Sosnoff and K. M. Newell, Information entropy analysis of discrete aiming movements,, Acta Psychological, 119 (2005), 283.

[29]

H. Lee and C. Billington, The evolution of supply-chain management models and practice at Hewlett-Packard,, Interfaces, 25 (1995), 42.

[30]

D. Li, Linear programming method for MADM with interval-valued intuitionist fuzzy sets,, Expert Systems with Applications, 37 (2010), 5939. doi: 10.1016/j.eswa.2010.02.011.

[31]

A. Ojha, B. Das, S. Mondal and M. Maiti, A stochastic discounted multi-objective solid transportation problem for breakable items using analytical hierarchy process,, Applied Mathematical Modeling, 34 (2010), 2256.

[32]

L. Peng, Z. Tong and Q. Li, "An Analysis of the Third Party Payment System Based on Service Supply Chain,", IEEE IRI 2009, (2009).

[33]

P. J. M. van Laarhoven and W. Pedrycz, A fuzzy extension of Saaty's priority theory,, Fuzzy Sets and Systems, 11 (1983), 229.

[34]

H. Rommelfanger, Interactive decision making in fuzzy linear optimization problems,, European Journal of Operational Research, 41 (1989), 210. doi: 10.1016/0377-2217(89)90386-X.

[35]

E. C. Rosenthal and J. L. Zydiac, Vendor selection with bundling,, Decision Sciences, 26 (1995), 35. doi: 10.1111/j.1540-5915.1995.tb00836.x.

[36]

A. V. Roth and L. J. Menor, Insights into service operations management: A research agenda,, Production and Operations Management, 12 (2003), 145. doi: 10.1111/j.1937-5956.2003.tb00498.x.

[37]

T. L. Saaty, A scaling method for priorities in hierarchical structures,, Journal of Mathematical Psychology, 42 (1977), 241.

[38]

T. L. Saaty, Response to holder's comments on the Analytic Hierarchy Process,, Journal of the Operational Research Society, 42 (1991), 909.

[39]

T. L. Saaty, "Multi-Criteria Decision Making: The Analytic Hierarchy Process,", 2nd edition, (1990).

[40]

M. Saleh, Estimating market shares in each market segment using the information entropy concept,, Applied Mathematics and Computation, 190 (2007), 1735.

[41]

C. E. Shannon, A Mathematical Theory of Communication,, The Bell System Technical Journal, 27 (1948), 379.

[42]

N. Slack, M. Lewis and H. Bates, The two worlds of operations research and practice: Can They meet, should they meet?,, International Journal of Operations and Production Management, 24 (2004), 374.

[43]

J. Spohrer, L. C. Anderson, N. J. Pass, T. Ager and D. Gruhl, Service science,, Journal of Grid Computing, 6 (2008), 313. doi: 10.1007/s10723-007-9096-2.

[44]

G. Wang, S. H. Hang and J. P. Dismukes, Product-driven supply chain selection using integrated multi-criteria decision making methodology,, International Journal of Production Economics, 91 (2004), 1.

[45]

T. C. Wang and Y. H. Chen, Applying fuzzy linguistic preference relations to the improvement of consistency of fuzzy AHP,, Fuzzy Sets and Systems, 178 (2008), 3755.

[46]

C. A. Weber and J. R. Current, A multi-objective approach to provider selection,, European Journal of Operational Research, 68 (2003), 173. doi: 10.1016/0377-2217(93)90301-3.

[47]

G. Vaidyanathan, A framework for evaluating third-party logistics,, Communications of the ACM, 48 (2005), 89. doi: 10.1145/1039539.1039544.

[48]

S. L. Vargo and R. F. Lusch, The four service marketing myths: Remnants of a goods-based, manufacturing model,, Journal of Service Research, 6 (2004), 324.

[49]

L. Vidal, E. Sahin, N. Martelli, M. Berhoune and B. Bonan, Applying AHP to select drugs to be produced by anticipation in a chemotherapy compounding unit,, Expert System with Application, ().

show all references

References:
[1]

G. Allon and A. Federgruen, Competition in service industries with segmented markets,, Management Science, 55 (2003), 619. doi: 10.1287/mnsc.1080.0946.

[2]

S. H. Amin, J. Razmi and G. Zhang, Supplier selection and order allocation based on fuzzy SWOT analysis and fuzzy linear programming,, Expert Systems with Applications, ().

[3]

E. G. Anderson and D. J. Morrice, A simulation game for service-oriented supply chain management,, Production and Operations Management, (2000), 40.

[4]

L. Berry, V. Shankar and J. Parish, Creating new markets through service innovation,, MIT Sloan Management Review, 47 (2006), 56.

[5]

N. Bhuiyan, E. Shuiabi and V. Thomson, Entropy as a measure of operational flexibility,, European Journal of Operational Research, 165 (2005), 696.

[6]

O. Cakir, On the order of the preference intensities in fuzzy AHP,, Computers and Industrial Engineering, 54 (2008), 993. doi: 10.1016/j.cie.2007.11.010.

[7]

X. Chao, L. Liu and S. Zheng, Resource allocation in multisite service systems with interstice customer flows,, Management Science, 49 (2003), 1739.

[8]

R. B. Chase, The mall is my factory: Lessons from a service junkie,, Production and Operation Management, 5 (1996), 298. doi: 10.1111/j.1937-5956.1996.tb00402.x.

[9]

S. S. Chauhdry, F. G. Forst and J. L. Zydiak, Vendor selection with price breaks,, European Journal of Operational Research, 70 (1993), 52. doi: 10.1016/0377-2217(93)90232-C.

[10]

I. J. Chen and A. Paulraj, Understanding supply chain management: Critical research and a theoretical framework,, International Journal of Production Research, 42 (2004), 131.

[11]

L. H. Chen and H. W. Lu, An approximate approach for ranking fuzzy numbers based on left and right dominance,, An International Journal of Computers and Mathematics with Applications, 41 (2001), 1589.

[12]

C. H. Cheng, Evaluating naval tactical missile systems by fuzzy AHP based on the grade value of membership function,, European Journal of Operational Research, 96 (1996), 343.

[13]

S. J. Cook, Kathy DeBree and Amie Feroleto, From raw materials to customers: Supply chain management in the service industry,, SAM Advanced Management Journal, 66 (2002), 14.

[14]

K. L. Croxton, S. J. Garcia-Dastugue, D. M. Lambert and D. L. Rogers, The supply chain management process,, International Journal of Logistics Management, 12 (2001), 13.

[15]

Z. Dagraeve and F. Roodhooft, A mathematical programming approach for procurement using activity based costing,, Journal of Business Finance and Accounting, 27 (2000), 69.

[16]

H. Dernirkan and H. K. Cheng, The risk and information sharing of application services supply chain,, European Journal of Operational Research, 187 (2008), 765.

[17]

D. de Waart and S. Kemper, 5 steps to service supply chain excellence,, Supply Chain Management Review, 8 (2004), 28.

[18]

L. M. Ellram, W. L. Tate and C. Billington, Understanding and managing the service supply chain,, Journal of Supply Chain Management, (2004), 17.

[19]

J. R. Figueira, A. Liefooghe, E. G. Talbi and A. P. Wierzbicki, A parallel multiple reference point approach for multi-objective optimization,, European Journal of Operational Research, 205 (2010), 390.

[20]

G. Friezlle and J. Efstathiou, "Seminar Notes on 'Measuring Complex Systems,'", London School of Economics, (2002).

[21]

G. Galante, G. Aiello, M. Enea and E. Panascia, A parallel multiple reference point approach for multi-objective optimization,, Waste Management, 30 (2010), 1720.

[22]

M. X. He and P. E. Ricci, Information entropy of orthogonal polynomials,, Orthogonal Systems and Applications, 128 (2002), 261. doi: 10.1016/S0096-3003(01)00075-3.

[23]

S. Jharkharia and R. Shank, Selection of logistics service provider: An analytic network process (ANP) approach,, International Journal of Management Science, 35 (2007), 274.

[24]

R. Johnston, Service operations management: Return to roots,, International Journal of Operations and Production Management, 19 (1999), 104. doi: 10.1108/01443579910247383.

[25]

H. Y. Kang and A. H. I. Lee, Priority mix planning for semiconductor fabrication by fuzzy AHP ranking,, Expert Systems with Applications, 32 (2007), 560.

[26]

A. Kaufmann and M. M. Gupta, "Introduction to Fuzzy Arithmetic,", Theory and Applications, (1991).

[27]

M. Kumar, P. Vart and P. Shankar, A fuzzy goal programming approach for supplier selection problem in a supply chain,, Computer and Industrial Engineering, 46 (2004), 69.

[28]

S. Lai, G. Mayer-Kress, J. J. Sosnoff and K. M. Newell, Information entropy analysis of discrete aiming movements,, Acta Psychological, 119 (2005), 283.

[29]

H. Lee and C. Billington, The evolution of supply-chain management models and practice at Hewlett-Packard,, Interfaces, 25 (1995), 42.

[30]

D. Li, Linear programming method for MADM with interval-valued intuitionist fuzzy sets,, Expert Systems with Applications, 37 (2010), 5939. doi: 10.1016/j.eswa.2010.02.011.

[31]

A. Ojha, B. Das, S. Mondal and M. Maiti, A stochastic discounted multi-objective solid transportation problem for breakable items using analytical hierarchy process,, Applied Mathematical Modeling, 34 (2010), 2256.

[32]

L. Peng, Z. Tong and Q. Li, "An Analysis of the Third Party Payment System Based on Service Supply Chain,", IEEE IRI 2009, (2009).

[33]

P. J. M. van Laarhoven and W. Pedrycz, A fuzzy extension of Saaty's priority theory,, Fuzzy Sets and Systems, 11 (1983), 229.

[34]

H. Rommelfanger, Interactive decision making in fuzzy linear optimization problems,, European Journal of Operational Research, 41 (1989), 210. doi: 10.1016/0377-2217(89)90386-X.

[35]

E. C. Rosenthal and J. L. Zydiac, Vendor selection with bundling,, Decision Sciences, 26 (1995), 35. doi: 10.1111/j.1540-5915.1995.tb00836.x.

[36]

A. V. Roth and L. J. Menor, Insights into service operations management: A research agenda,, Production and Operations Management, 12 (2003), 145. doi: 10.1111/j.1937-5956.2003.tb00498.x.

[37]

T. L. Saaty, A scaling method for priorities in hierarchical structures,, Journal of Mathematical Psychology, 42 (1977), 241.

[38]

T. L. Saaty, Response to holder's comments on the Analytic Hierarchy Process,, Journal of the Operational Research Society, 42 (1991), 909.

[39]

T. L. Saaty, "Multi-Criteria Decision Making: The Analytic Hierarchy Process,", 2nd edition, (1990).

[40]

M. Saleh, Estimating market shares in each market segment using the information entropy concept,, Applied Mathematics and Computation, 190 (2007), 1735.

[41]

C. E. Shannon, A Mathematical Theory of Communication,, The Bell System Technical Journal, 27 (1948), 379.

[42]

N. Slack, M. Lewis and H. Bates, The two worlds of operations research and practice: Can They meet, should they meet?,, International Journal of Operations and Production Management, 24 (2004), 374.

[43]

J. Spohrer, L. C. Anderson, N. J. Pass, T. Ager and D. Gruhl, Service science,, Journal of Grid Computing, 6 (2008), 313. doi: 10.1007/s10723-007-9096-2.

[44]

G. Wang, S. H. Hang and J. P. Dismukes, Product-driven supply chain selection using integrated multi-criteria decision making methodology,, International Journal of Production Economics, 91 (2004), 1.

[45]

T. C. Wang and Y. H. Chen, Applying fuzzy linguistic preference relations to the improvement of consistency of fuzzy AHP,, Fuzzy Sets and Systems, 178 (2008), 3755.

[46]

C. A. Weber and J. R. Current, A multi-objective approach to provider selection,, European Journal of Operational Research, 68 (2003), 173. doi: 10.1016/0377-2217(93)90301-3.

[47]

G. Vaidyanathan, A framework for evaluating third-party logistics,, Communications of the ACM, 48 (2005), 89. doi: 10.1145/1039539.1039544.

[48]

S. L. Vargo and R. F. Lusch, The four service marketing myths: Remnants of a goods-based, manufacturing model,, Journal of Service Research, 6 (2004), 324.

[49]

L. Vidal, E. Sahin, N. Martelli, M. Berhoune and B. Bonan, Applying AHP to select drugs to be produced by anticipation in a chemotherapy compounding unit,, Expert System with Application, ().

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