A Decision Support System for Purchasing Management of Large Projects

This paper describes a model base Decision SupportSystem (DSS) for purchasing materials and componentsfor large projects. The DSS may be used under twoscenarios. Under one scenario, we have a project toexecute, and we are looking for a good way to managethe purchasing so as to minimize the expected costs.The decision variable under our control is when andfrom whom to order each item. Under the otherscenario, we are bidding for the project, and wish toassess the costs associated with the purchasingdecisions which we should consider before making ourbid. In both cases we take into account expected outof pocket costs as well as lateness and/or expeditingpenalties. The DSS is designed to help us choose thebest supplier for each item and schedule the placementof the orders--decisions which are very difficult tomake well without such a model base DSS