Procedural rationality in supplier selection: Outlining three heuristics for choosing selection criteria
ISSN: 0025-1747
Article publication date: 13 February 2017
Issue publication date: 13 February 2017
Abstract
Purpose
The purpose of this paper is to present three heuristics for choosing supplier selection criteria. By considering the balance between the expected relative effort and benefit of using different selection criteria, the heuristics suggest which criteria should be prioritized. The heuristics serve to develop our understanding of the search and evaluation heuristics used in supplier selection and to facilitate further research.
Design/methodology/approach
The research is primarily theoretical, yet draws on empirical studies of supplier selection. The theoretical basis is Simon’s notion of procedural rationality (Simon, 1976). The author makes the general notion of procedural rationality more concrete for supplier selection by formally describing three heuristics for choosing selection criteria. The heuristics share the same logic but differ in terms of the precision of the input information required from the purchaser. The paper provides illustrations of the heuristics.
Findings
It appears that procedural rationality can be specified for the process of designing the supplier selection process by explicitly recognizing the cost and value of selection criteria. There is no one way of doing this, but at the most basic level, it requires an ordinal ranking of criteria. Already such a rudimentary, qualitative, assessment can help identifying suitable criteria. The heuristics developed appear compatible with established approaches for the subsequent selection of suppliers.
Originality/value
The paper addresses the early stage of supplier selection which has been largely ignored in the literature.
Keywords
Acknowledgements
The author acknowledges Tim Torvatn, Juan Gaytán, Pilar Arroyo and the two anonymous reviewers for their valuable comments on earlier drafts of this paper. Furthermore, the author would like to thank Ruud Egging for his support and for verifying the numerical example in the paper.
Citation
de Boer, L. (2017), "Procedural rationality in supplier selection: Outlining three heuristics for choosing selection criteria", Management Decision, Vol. 55 No. 1, pp. 32-56. https://doi.org/10.1108/MD-08-2015-0373
Publisher
:Emerald Publishing Limited
Copyright © 2017, Emerald Publishing Limited