Contractor accreditation: A probabilistic model

Contractor accreditation: A probabilistic model

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Article ID: iaor20083644
Country: United States
Volume: 28
Issue: 2
Start Page Number: 235
End Page Number: 259
Publication Date: Apr 1997
Journal: Decision Sciences
Authors: ,
Keywords: decision: applications, organization
Abstract:

The selection of competent contractors is a critical function in all business organizations. In contrast to other types of vendors (e.g., distributors, manufacturers, etc.), contractors are typically accredited before any business transaction takes place. In such situations, there is often a considerable amount of uncertainty associated with the accreditation process. This research presents a probabilistic model for accrediting contractors. We discuss a methodology in which probability measures are used to capture the uncertainty inherent in the decision process. These probabilities are estimated from data on (i) past applicants and (ii) their eventual performance, if accredited. Furthermore, these probabilities are used to determine when additional information about an applicant should be collected, as well as what kind of information would be most relevant for the vendor under consideration.

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