An examination of decisions maker's intrinsic characteristics and their effects on the valuation of supplier attributes procurement
Conference Paper
Overview
Overview
abstract
2016 American Society for Engineering Management. The current era of globalization and outsourcing has increased complexity in the competitive market among manufacturers and distributers. Sourcing decisions have taken on a more strategic role; this requires professionals that can make decisions that balance numerous competing demands. Very little work exists that examines how sourcing professionals make these decisions or whether their background or intrinsic preferences and biases affect these decisions. This work hypothesizes that supplier selection criteria (and the perceived value associated with those criteria) for decision makers are formulated by a decision maker's attitude towards risk management and his/her cognitive ability. This paper advances a methodology to find relationships among the perceived value of selection criteria for decision makers, their rationality, risk preferences, cognitive ability, and demographic and professional background. Data from industry professionals representing manufacturers and distributors are shown detailing the relationships among selection criteria, the perceived value of alternative attributes, risk attitudes, and cognitive capabilities. Correlations and comparisons are made on the basis of industry (distributor versus manufacturer), role, and experience. Distinct differences are shown for manufactures as compared to distributors; cognitive ability is significantly correlated with rationality with respect to attribute valuation. Experience and education are shown to have significant relationships with risk attitudes.
