Strategic procurement process for multiple items in a supply chain

Abstract

©ECMS Mauro Iacono, Francesco Palmieri, Marco Gribaudo, Massimo Ficco (Editors). Procurement, the process of acquiring goods or services from the external providers, involves strategic sourcing and purchasing. Observing the researches related to procurement finds that many researches study sourcing and purchasing separately, missing out the essence of the procurement process. This paper shows procurement process from sourcing to purchasing. The methods used to select the supplier and to determine the order quantity in the researches are reviewed. Moreover, this paper explains the procurement process through a case of an oilrigs manufacturer. AHP is applied for supplier selection, then the multiple items are purchased from the selected supplier. The 3 models of applied EOQ method for the order quantity are compared. The method of partially jointly order the items by applied EOQ method is selected with the lowest total costs.