Strategic Selection of Suppliers Using Corrected Factor Analysis Based on Data Envelopment Analysis

Establishment of strategic alliances and formation of integrated supply chains is an obligation nowadays. This is mainly forced by the necessity of specialization of businesses as the result of market requirements and tendency of customers to customized products and services. Under present circumstances, a supplier selection approach which is compatible with the long-term objectives and strategies of the enterprise increases corporate efficiency and effectiveness; this leads to a more productive enterprise. This research focuses on the strategic selection of suppliers considering the interrelation of decision data. Here, an integrated structure is built in order to appropriate determination of enterprise strategies as well as their transformation into applicable criteria for supplier selection. This structure employs a combination of an adjusted factor analysis approach with multi-attribute decision making techniques within data envelopment analysis framework to evaluate decision alternatives; the alternatives which are not appropriate to be evaluated with traditional approaches of data envelopment analysis due to small number of them. Finally, the presented methodology is implemented in a corporation within Iranian foodstuff industry and its results are validated using a nonparametric statistical test in comparison with an extended model of data envelopment analysis.