A decision tree approach for selecting between demand based, reorder, and JIT/kanban methods for material procurement

Sanchoy Das, Sanjay Bhambri

Research output: Contribution to journalArticlepeer-review

3 Scopus citations

Abstract

In designing mechanisms for the procurement of raw materials, a manager is often faced with the task of selecting from a variety of possible methods. Since the performance of these methods is a function of the environment in which they are implemented, it is the responsibility of the manager to select the method best suited for a particular application. In this paper we present a methodology for assisting managers in the selection process. Specifically, three classes of procurement methods are considered, these are: Demand based, reorder, and JIT methods. The selection methodology is structured as a decision tree, which considers the annual usage value, lead time ratio, holding cost, vendor location, vendor delivery performance, and material supply value. Each factor is evaluated on a three level scale, and on the basis of these evaluations the tree makes a selection. The application of the methodology is illustrated via some examples.

Original languageEnglish (US)
Pages (from-to)342-348
Number of pages7
JournalProduction Planning and Control
Volume5
Issue number4
DOIs
StatePublished - Jan 1 1994

All Science Journal Classification (ASJC) codes

  • Computer Science Applications
  • Strategy and Management
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

Keywords

  • Inventory control
  • JIT
  • Purchasing

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