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Strategic Supplier Selection in Payment Industry: A Multi-Criteria Solution for Insufficient and Interrelated Data Sources

Author

Listed:
  • Siavash Hekmat

    (FANAP Studies & Research Center, Pardis Technology Park Pardis, Tehran, Iran)

  • Maghsoud Amiri

    (Department of Industrial Management, Faculty of Management and Accounting, Allameh Tabataba’i University, Tehran, Iran)

  • Golshan Madraki

    (Engineering and Management, David D. Reh School of Business, Clarkson University, Potsdam, NY, USA)

Abstract

Our goal is to address the complicated problem of strategic supplier selection with interrelated and insufficient data. To achieve this goal, we proposed our Strategic Supplier Selection Methodology (SSSM). First, SSSM formulates the enterprise strategies and evaluation criteria. Then, we developed a novel method called Grey Principal Component Analysis-Data Envelopment Analysis (GPCA-DEA) to evaluate suppliers in SSSM. GPCA-DEA overcomes the major disadvantages and limitations of former methodologies (e.g., DEA) while dealing with insufficient and interrelated data. Finally, SSSM applies Multiple Attribute Decision-Making (MADM) methods to select suppliers based on the ranking score. The application of SSSM is illustrated in the payment industry to select Payment Initiation Service Providers (PISP). For the first time, we considered the payment industry-specific criteria in compliance with the latest regulation (PSD2). The Spearman rank correlation statistical test showed that our method (GPCA-DEA used in SSSM) yields more reliable results than a former version of DEA.

Suggested Citation

  • Siavash Hekmat & Maghsoud Amiri & Golshan Madraki, 2021. "Strategic Supplier Selection in Payment Industry: A Multi-Criteria Solution for Insufficient and Interrelated Data Sources," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 20(06), pages 1711-1745, November.
    • Handle: RePEc:wsi:ijitdm:v:20:y:2021:i:06:n:s0219622021500474
    DOI: 10.1142/S0219622021500474
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