A case study on how an e-tailer can usea multiple criteria ABC analysis toidentify risk in the selection of suppliers
Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Purpose – The purpose of this master thesis is to explore how an e-tailer selling bulkyitems can use a multiple criteria ABC analysis to make its purchasing process moreeffective, while balancing richness and reach, with the performance measurements ofprofitability, total asset turnover and inventory turnover. The purpose will beaccomplished through a single case study on an e-tailer active on the Swedish furnitureand home furnishing market.Methodology – This thesis applies a multiple criteria ABC-analysis to a single casestudy. The approach is semi-deductive as theory is combined with interviews on how tomatch and adapt theory about inventory control and purchasing with the specificrequirements of an e-tailer selling bulky items.Findings – This thesis has resulted in a set of recommendations that aim to make thepurchasing process of an e-tailer more effective. That is, capital and inventory space willbe better allocated to the e-tailer’s more profitable items. Among other things, this thesisshows how dead articles can be identified and how a purchaser can prioritize moreprofitable articles over less profitable ones when making procurement decisions. Theother recommendations are for the e-tailer to investigate the possibilities of decouplingthe supply chain by keeping stock at the suppliers’ premises, to match the supplierreliability with their importance in the supply chain, and lastly to explore possibilities ofdrop shipment. Further, the main finding is that a comparison between the A-, B-, andC-classes and the reliability of the suppliers, highlights a gap and a possible risk. Putdifferently, the importance of a specific item for the business should be reflected in thechoice of supplier and the multiple criteria ABC analysis is the tool to illustrate theimportance. Keywords – E-commerce, E-tailer, richness, reach, transaction cost, ABCanalysis, multiple criteria ABC, MCABC, inventory turnover ratio, supplier selection,purchasing
Place, publisher, year, edition, pages
2016. , 92 p.
E-commerce, E-tailer, richness, reach, transaction cost, ABC analysis, multiple criteria ABC, MCABC, inventory turnover ratio, supplier selection, purchasing
Economics and Business
IdentifiersURN: urn:nbn:se:kth:diva-189758OAI: oai:DiVA.org:kth-189758DiVA: diva2:948746