Article ID: | iaor19991218 |
Country: | Netherlands |
Volume: | 96 |
Issue: | 1 |
Start Page Number: | 97 |
End Page Number: | 102 |
Publication Date: | Jan 1997 |
Journal: | European Journal of Operational Research |
Authors: | Roodhooft Filip, Konings Jozef |
Keywords: | activity costing, vendor selection |
In this paper we propose an Activity Based Costing approach for vendor selection and evaluation. This system allows us to compute total costs caused by a supplier in a firm's production process, thereby increasing the objectivity in the selection process. We further show that for vendor evaluation purposes the difference between the budgeted and actual total vendor score can be decomposed in a purchaser effect, a supplier effect and a combined effect. We illustrate the Activity Based Costing approach with a case study.