Supplier Selection by

Supplier selection becomes a concern as companies focus their business on their core competencies and give more responsibilities to their suppliers. Those companies have to make supplier selection decision under information uncertainty. Therefore, companies need tools to make supplier selection under uncertainty as well as a better supplier selection process. This thesis's goal was to provide help in both of those areas. This thesis uses game theory, Bayesian theory and industry case studies to address supplier selection issues. First, is showed why customer can get "locked " into relationships where, due to the existing supplier selection process, suppliers are not cooperative. Second, a mathematical framework is provided to help decision-makers in their supplier selection, under process capability information uncertainty. This mathematical framework estimates the quality cost of potential suppliers, as well as the reliability of the suppliers ' manufacturing processes and suppliers ' process capability information: it gives an updated product expected cost to the customer. Third, the current supplier selection process used by two companies is described and the product characteristics that influence the supplier selection, the different types of relationshi