Grey System Theory

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DESIGN OF TWO STAGES BIDDING FOR OPTIMIZATION OF SUPPLIER USING GREY SYSTEM THEORY Abstract :Evaluation of non-technical parameters for supplier selection in Multi-attribute single or multi item Procurement systems has been a point of concern for many organization and research experts across the globe. Many theories, models and methods have been designed to address this challenges to develop a ready to use off-the-shelf solution. One such theory is Grey System Theory (GST). Through a numerical example in manufacturing sector, this paper depicts the implementation of GST for supplier selection by implementing multi-stage bidding model for procurement process optimization. Application of GST is an apt solution for evaluation of non-technical…show more content…
Some other typical features of e-procurement-enabled platform would be like product comparisons across vendors and various processes like tendering, auctioning, vendor management, and catalogue & contract management. Also, high-end e-procurement solutions allow organizations to define their own processes in the form of workflows thus utilizing concepts of business process modeling. In the proposed model the reverse auction [1] method is used. The two stage bidding model [2] is introduced to overcome the technical parameter issues such as in competition the many suppliers bid their goods for lower bid. In such cases the quality of the product is not considered at all. So the advantage of the two stage bidding is to select the suppliers who meet all the buyer preferences at first stage and then only those suppliers are invited for second stage of bidding such as non technical parameter bidding. After the second stage of bidding to evaluate the supplier the Multiple Criteria Decision Making (MCDM) Technique that is grey system theory [3] is used. Deng [3] had proposed Grey relational analysis in the Grey theory that was already proved to be useful for dealing with poor, incomplete, and uncertain information and it is a simple and accurate method for multiple attributes decision problems [4, 5, 6, 7]. Grey relational analysis (GRA) is part of grey system theory,…show more content…
Therefore, alternatives with multiple attributes can be compared easily after the GRA process. The process of combining attribute values into a single value. GRA has been successfully applied in solving a variety of MADM problems, such as the hiring decision, the restoration planning for power distribution systems, the inspection of integrated-circuit marking process, the modeling of quality function deployment, the detection of silicon wafer slicing defects, etc. Mathematical Model The following are the notations used in the proposed model for single item with multiple attributes. TABLE 1 NOTATIONS Notation Description i € 1…..n Index of items j € 1…..m Index of suppliers k € 1…..g Index of attributes of item i Di Demand for item i lij Delivery by supplier j when supplying item i qij Quality(defectives) of supplier j when supply item i Qij Acceptable quality for item i Li Acceptable delivery for item i Sjik Suppliers parameters specification(technical) Bik Buyer requirement specification(technical

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