Towards efficient logistics through suitable negotiation strategies: the role of uncertainty

Abstract

Uncertainty is a factor that affects many decision-making situations in practice. Supplier management and its flows in companies is no exception. This paper focusses on the choice of the most appropriate strategy towards suppliers in a company. This topic is unfairly neglected in the literature compared to other decisions related to suppliers, such as supplier selection or evaluation. For the sake of robustness, two different hybrid methods of multicriteria decision making, allowing managers to capture the uncertainty, are applied and compared. Namely, the AHP method together with Stochastic Multicriteria Acceptability Analysis (SMAA), and the fuzzy extension of the PROMETHEE method. The goal of this paper is twofold. First, the best strategy is explored with respect to time and uncertainty before the nomination of a supplier is done and after that. Second, it is pointed out how much oversimplifying and distorting the aggregation of opinions using the averaging operator can be. The results showed that examining individual evaluations helps better understand the impact of the uncertainty on the most suitable strategies towards suppliers, in comparison with the final ranking based on averaging individual opinions. The performed survey revealed that choosing the best strategy before nominating a supplier is more difficult than doing so after the nomination.