An optimization approach to strategic sourcing: A case study of the United States Air Force
Apte, Aruna U.
Rendon, Rene G.
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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.
The article of record as published may be located at http://dx.doi.org/10.1016/j.pursup.2011.03.002
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Rendon, Rene G. (Monterey, California. Naval Postgraduate School, 2005-01-31); NPS-GSBPP-05-001This research report discusses the transformation occurring in the procurement and purchasing function, specifically as it applies to developing procurement strategies and the implementation of commodity strategies as an ...
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