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Vendor selection and evaluation. An activity base costing approach. (English) Zbl 0926.90051

Summary: We propose an Activity Based Costing approach for vendor selection and evaluation. This system allows us to compute total costs caused by a supplier in a firm’s production process, thereby increasing the objectivity in the selection process. We further show that for vendor evaluation purposes the difference between the budgeted and actual total vendor score can be decomposed in a purchaser effect, a supplier effect and a combined effect. We illustrate the Activity Based Costing approach with a case study.

MSC:

90B50 Management decision making, including multiple objectives
91B38 Production theory, theory of the firm
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