Using Super-Efficiency Analysis for Ranking Suppliers in the Presence of Volume Discount Offers

Abstract

Purpose – The purpose of this paper is to propose an innovative algorithm for ranking suppliers in the presence of volume discount offers, with regard to various criteria, based on super-efficiency analysis.

Design/methodology/approach – This paper introduces an innovative approach, which is based on super-efficiency analysis (one of the data envelopment analysis models).

Findings – To rank the suppliers in the conditions that they offer volume discounts, an algorithm was introduced.

Practical implications – The results of this paper can be applied from both a buyer's and supplier's perspective. The buyer can use it as a tool in ranking the suppliers. The supplier can use these results from a marketing perspective. A specific supplier who achieves a high mean score, when compared to the other suppliers, can use these results for promoting its product. On the other hand, if a particular supplier is poorly performing, then the supplier can use the analysis for benchmarking purposes. This result may mean that the supplier must provide better performance levels at the same input.

Originality/value – To the best of the author's knowledge, there is no comprehensive and feasible model that deals with supplier ranking by super-efficiency analysis in the presence of volume discount offers.