Supplier selection model based on discrete choice analysis and its application in the apparel industry of Bangladesh

Abstract

Supplier selection is crucial for the success of any manufacturing organization as it provides the maximum opportunity for cost reduction. This study proposes a market-utility based approach to identify the key supplier selection criteria and rank supplier alternatives based on those criteria. Discrete choice analysis technique is used in this thesis to collect response since it replicates the actual choice of the respondents. The study also investigates the gap between perception and actual choice of the managers. This study is focused towards the apparel industry of Bangladesh. This study identified the key supplier criteria to be cost, responsiveness, lead time, company status, and quality. The study also identified that though the managers perceive quality to be an important criterion, they actually choose suppliers mostly focusing on cost of the product and responsiveness of the supplier. Suppliers for apparel industry of Bangladesh can gain an understanding of the decision-making processes and practices of supplier selection from this study.