An optimization approach to strategic sourcing: A case study of the United States Air Force
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Authors
Apte, Aruna U.
Rendon, Rene G.
Salmeron, Javier
Subjects
Contracting
Procurement process
Optimization
Set covering problem
Strategic sourcing
Procurement process
Optimization
Set covering problem
Strategic sourcing
Advisors
Date of Issue
2011
Date
Publisher
Language
Abstract
The DoD annually procures billions of dollars worth of systems, supplies, and services in support of the
national military strategy. Faced with budget cuts and other resource constraints, the DoD must
transform its procurement process to ensure cost-effective sourcing of critical supplies and services.
One aspect of current transformation in the DoD is the use of a strategic sourcing approach for the
procurement of services at military installations. Using the Air Force’s strategic sourcing process as our
context, we developed an optimization model for selecting a set of proposals from among multiple
offerors for services to be performed at multiple installations. The selection achieves the most favorable
objective by balancing the confidence level in an offeror’s past performance with the cost of services to
the Air Force. The research findings, which are based on a realistic scenario, demonstrate improvements
over the current sourcing process in both overall performance and cost.
Type
Article
Description
The article of record as published may be located at http://dx.doi.org/10.1016/j.pursup.2011.03.002
Series/Report No
Department
Graduate School of Business & Public Policy (GSBPP)
Operations Research
Organization
Identifiers
NPS Report Number
Sponsors
The authors wish to acknowledge the Naval Postgraduate School Acquisition Research Program Office for sponsoring this research.
Funder
Format
Citation
Journal of Purchasing & Supply Management, Volume 17, 2011, pp. 222-230.
Distribution Statement
Rights
This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.