Title: Total cost of ownership purchasing of a service : the case of airline slection at Alcatel Bell
Authors: Degraeve, Zeger
Labro, E
Roodhooft, Filip
Issue Date: 2000
Publisher: K.U.Leuven - Departement toegepaste economische wetenschappen
Series Title: DTEW Research Report 0011 pages:1-39
Abstract: The multiple objective problem of purchasing for business falls into two broad categories: the purchasing of components for manufacturing and the purchasing of services. Several supplier selection models have been suggested in the literature for the purchasing of production-related components. To our knowledge, no supplier selection model for the purchasing of services has been published. In this paper we elaborate on a mathematical programming model that selects suppliers of a multiple item service and simultaneously determines market shares of the suppliers selected. The methodology is based on the collection of Total Cost of Ownership (TCO) information, quantifying all the costs associated with the purchasing process throughout the entire value chain of the firm. We apply this methodology to the real life case study of selecting airlines for 56 destinations at Alcatel Bell and have obtained TCO savings of 19.5%.
Publication status: published
KU Leuven publication type: IR
Appears in Collections:Research Center Accountancy, Leuven

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