Supplier selection in emerging market economies: a discrete choice analysis

Hayk Manucharyan ()
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Hayk Manucharyan: Faculty of Economic Sciences, University of Warsaw

No 2020-11, Working Papers from Faculty of Economic Sciences, University of Warsaw

Abstract: This study presents the perceived importance of different supplier attributes for managers’ choice of suppliers in emerging market economies. We analyze the supplier selection process based on multiple attributes categorized into six groups: quality, cost, delivery, product, service, and business. Empirical data for this study was collected from 163 corporate executives in the automotive and fast-moving consumer goods industries operating in Poland and India. A two-part survey was conducted; the first part consisted of a Likert scale set of questions aimed at determining the perceived importance of supplier attributes. The second part of the survey was a discrete choice experiment that examined the actual choices of experimental supplier profiles made by executives. Comparing our results to previous works in this domain, we find that the importance of the cost attribute has decreased over the past two decades, whereas the relevance of delivery and product has increased. Each of the six supplier attributes was broken down into sub-attributes, which provided us with an insight into the decision-making process. The results indicate that with respect to delivery, delivery lead time, responsiveness to demand fluctuations, and compliance with due date had a significant effect on executives’ decisions. At the same time, new product availability and product range played crucial role amongst product attributes. Finally, the dataset was split into different sub-groups, based on the two industries and two countries analyzed, to examine industrial and cultural differences.

Keywords: supplier selection; vendor selection; purchasing; supply chain management; conjoint analysis; stated preferences; discrete choice experiment (search for similar items in EconPapers)
JEL-codes: C01 C44 C90 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2020
New Economics Papers: this item is included in nep-dcm and nep-exp
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Persistent link: https://EconPapers.repec.org/RePEc:war:wpaper:2020-11

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