Title: Improving the efficiency of the purchasing process using total cost of ownership information: The case of heating electrodes at Cockerill Sambre SA
Authors: Degraeve, Zeger ×
Roodhooft, Filip #
Issue Date: Jan-1999
Publisher: Elsevier science bv
Series Title: European journal of operational research vol:112 issue:1 pages:42-53
Abstract: Improving the efficiency of the purchasing process provides important opportunities to increase a firm's profitability. In this paper we introduce a mathematical programming model that uses total cost of ownership information to simultaneously select suppliers and determine order quantities over a multi-period time horizon. The total cost of ownership quantifies all costs associated with the purchasing process and is based on the activities and cost drivers determined by an activity based costing system. Our approach is motivated by the purchasing problem of heating electrodes at Cockerill Sambre, a Belgian multinational steel producer. In this case quality issues account for more than 70% of the total cost of ownership making the quality of a supplier a critical success factor in the supplier selection process. (C) 1999 Elsevier Science B.V, All rights reserved.
ISSN: 0377-2217
Publication status: published
KU Leuven publication type: IT
Appears in Collections:Research Center for Operations Research and Business Statistics (ORSTAT), Leuven
Research Center Accountancy, Leuven
× corresponding author
# (joint) last author

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