2013_iciim_the optimal relationship between buyer and seller-using topsis method

8/19/2019 2013_iciim_the Optimal Relationship Between Buyer and Seller-using Topsis Method

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The Optimal Relationship between Buyer andSeller Obtained Using TOPSIS Method

Feng-Yi u!raduate Institute o" Management S#ien#es$ Tam%ang Uni&ersity

'mail( annie)wu*++,msa)hinet)net

.hung-.hu .huang!raduate Institute o" Management S#ien#es$ Tam%ang Uni&ersity

'mail( ###huangmail)t%u)edu)tw

Abstract —Achieving optimal buyer–seller relationship is a

growing concern among members of market channelsbecause all members of the retail industry are increasingly

linked to each other. A good buyer–seller cooperative

relationship increases revenue, whereas a poor relationship

increases the cost of communication. This study is to

investigate the distributors in food industry by using the

Technique for Order reference by !imilarity to "deal

!olution #TO!"!$ method for normali%ing the collected

data. The results show that the optimal relationships e&ist

for companies with revenues between '(( million to '(((

million.

Index Terms —ower, )ommunication, !atisfaction,

Technique for Order reference by !imilarity to "deal

!olution #TO!"!$.

I) I /TRO0U.TIO/

O&er the past three de#ades$ buyer1seller relationshipsha&e be#ome one o" the most in&estigated topi#s inmar%eting resear#h) Many studies ha&e "ound thate2ertion o" power has a signi"i#ant in"luen#e on buyer1 seller relationships 34-*5) !ood relationships enableorgani6ations to a#7uire more #ustomers) The wide&ariety o" bri#%-and-mortar or &irtual #hannels allows#ustomers to use these options$ whi#h #an "urther

in"luen#e the re&enue out#ome 385) The TOPSIS methodwas initially presented by Yoon and 9wang 3:5 and ;ai$;iu$ and 9wang 3<5) This method is a pro#ess o" "indingthe best solution among all pra#ti#al alternati&es) The"inding o" our resear#h will help enterprises toappropriately allo#ate their resour#es and there"ore ha&elong-term #ompetiti&e ad&antages) In Se#tion *$ were&iew rele&ant literature and resear#h design) Se#tion 8introdu#es the TOPSIS method) Se#tion : presents anempiri#al e2ample and the "inal se#tion reports the#on#lusions drawn "rom the study)

II) ;IT'R=TUR' R '>I' =/0 R 'S'=R.9 0'SI!/

.hannel power re"ers mainly to #hannel members? per#eption toward reward and punishment system$ legal

@

a#t$ re#ognition$ pro"essional %nowledge$ and s%ills)These powers demonstrate intentionA the #hannelmembers? aim is to #hange the other party?s de#ision$e2e#ution$ and$ on a psy#hologi#al le&el$ their #ognition35) In numerous studies$ #ommuni#ation is #onsidered a"a#tor in&ol&ed in the su##ess"ul de&elopment o" long-term buyer1seller relationships) From the people

perspe#ti&e$ #ommuni#ation is a way o" establishing andmaintaining a sound relationship among di""erent groupsor partners who are #losely #onne#ted 3,5) In a buyer1 seller relationship$ satis"a#tion is not one-dimensionalA it#an be "urther #ategori6ed into e#onomi# and non-e#onomi# satis"a#tion 3C5) The subDe#ti&e e#onomi#satis"a#tion is pro&ided by other #hannel members$whereas non-e#onomi# satis"a#tion is the reward o" members demonstrating their emotional "eelings or theout#ome o" assessing the intera#tions between members3E5) In this study$ the #riteria "or studying a relationshipare #oer#i&e power$ #ommuni#ation$ and satis"a#tion) Thes#ale o" #oer#i&e power was de&eloped "rom the huangand Tsang 34+5 study) The s#ale o" #ommuni#ation wasde&eloped "rom the study by RodrGgue6$ =gudo$ and!utiHrre6 3445) The s#ale o" satis"a#tion was de&eloped"rom the !eys%ens and Steen%amp 3C5 study) This studye2amines the "ood industry as the resear#h subDe#tthrough 8+C &alid 7uestionnaires)

III) TOPSIS M'T9O0

This study uses the TOPSIS method) = positi&e idealsolution ma2imi6es the bene"it #riteria or attributes andminimi6es the #ost #riteria or attributes$ whereas anegati&e ideal solution ma2imi6es the #ost #riteria or attributes and minimi6es the bene"it #riteria or attributes)The TOPSIS method is e2pressed in a su##ession o" si2steps as "ollows(Step 4( .al#ulate the normali6ed de#ision matri2) The

normali6ed &alue ijr is #al#ulated as "ollows(

∑−

=m

i

ijijij x xr 4

* i 4$ *$ )))$ m and D 4$ *$ )))$ n)

4J<



Step *( .al#ulate the weighted normali6ed de#ision

matri2) The weighted normali6ed &alue vij is

#al#ulated as "ollows(

wr v jijij ×= i 4$ *$)))$ m and D 4$ *$ )))$ n)

K4L

where w j is the weight o" the j

th #riterion or

attribute and ∑=

=n

j jw

4

4 )

Step 8( 0etermine the ideal K AM

L and negati&e ideal K

A−

L solutions)

OLNOminKL$Oma2PKM

j j C vC v A cijibiji∈∈=

K*L

LNOma2KL$OminPK j j C vC v A cijibiji=∈∈=

−

K8L

Step :( .al#ulate the separation measures using the m-dimensional 'u#lidean distan#e) The separation measureso" ea#h alternati&e "rom the positi&e ideal solution andthe negati&e ideal solution$ respe#ti&ely$ are as "ollows(

∑=

=−=m

j jiji m jvvS

4

*MM$)))$*$4$LK

K:L

∑=

−−=−=

m

j

jiji m jvvS

4

*$)))$*$4$LK

K<L

Step <( .al#ulate the relati&e #loseness to the ideal

solution) The relati&e #loseness o" the alternati&e Ai

with respe#t to AM

is de"ined as "ollows(

mi

S S

S RC

ii

i

i $)))$*$4$

M

M=

+

=−

−

KL

Step ( Ran% the pre"eren#e order)

I>) 'MPIRI.=; 'Q=MP;'

This study tests the relationship between a buyer and a

seller in a Taiwanese #hannel) The buyers? re&enue is#lassi"ied into "our types( 4+< #ompanies with re&enue o" under <+ million$ E8 #ompanies with re&enue o" <+1<++million$ 8+ #ompanies with re&enue o" <++1<+++ million$and C+ #ompanies with re&enue abo&e <+++ million) Four #riteria were established through numerous dis#ussions(#oer#i&e power$ #ommuni#ation$ e#onomi# satis"a#tion$and non-e#onomi# satis"a#tion in Table 4) Then the

pro#edure o" TOPSIS "or inter&al number #an bee2pressed in the "ollowing steps) e normali6ed the#olle#ted data in Table *) =ll the abo&e #riteria ha&e thesame importan#e) In this study$ we adopt the suggestiono" ahanshahloo et al) 34*5 and all #riteria are gi&en a

weighting o" +)*< "or normali6ation) e used '7uationsK4L to "ind the weighted normali6ed de#ision matri2shown in Table 8)

T=B;' 4) T9' .O;;'.T'0 0=T= OF R'>'/U' TYP'

Re&enuetype

.oer#i&e power

.ommuni#ation#ost

'#onomi#satis"a#tion

/on-e#onomi#

satis"a#tion4) under

<+million

:)< :)4E :)*8 :)C

*) <+million1

<++

million

:)*< :)8C :)4, <)*4

8) <++million1

<$+++million

<)*C <)*< <)*C <)+<

:) abo&e<$+++

million<)8E :)4< <)4E <)8C

T=B;' *) T9' /ORM=;I'0 M=TRIQ IT9 R'>'/U' TYP'

=/0 '>=;U=TIO/ .RIT'RI=

Re&enue type

.oer#i&e power

.ommuni#ation#ost


/on-e#onomi#

satis"a#tion

4) under <+million

+)*8:+C +)*884 +)**:4< +)*8+84<

*) <+million1

<++million

+)*4C4,* +)*:8,8E +)**+EC +)*<8EC

8) <++million1

<$+++million

+)*,4+:, +)*E*4<8 +)*,EC+E +)*:C<*:

:) abo&e<$+++

million+)*,E: +)*8+E:+ +)*,<+: +)*:,:

T=B;' 8) .RIT'RI= 'I!9TI/!

Re&enue type

.oer#i&e power

.ommuni#ation#ost


/on-e#onomi#

satis"a#tion

*J<



4) under <+

million+)+<C<** +)+<C*E4 +)+<+:4 +)+<,<,E

*) <+million1

<++

million

+)+<:<:8 +)++E8: +)+<<*: +)+:+EE

8) <++million1

<$+++million

+)+,,* +)+,8+8C +)+EE<* +)+*484

:) abo&e<$+++

million+)+E4,: +)+<,,8< +)+C, +)+4E4

The positi&e ideal K=L and negati&e ideal K=-Lsolutions are determined using '7uations K*L and K8L) Theresults are shown in Table :) The separation o" ea#halternati&e solution is #al#ulated using '7uations K:L andK<L) The "inal results are shown in Table <)

T=B;' :) POSITI>' I0'=; =/0 /'!=TI>' I0'= SO;UTIO/S

Solution.oer#i&e power

.ommuni#ation#ost


/on-e#onomi#

satis"a#tionPositi&e

ideal+)+E4,8 +)+,8+8C +)+<<*: +)+<,<,C

/egati&eideal

+)+<:<:8 +)+<,,8< +)+EE<* +)+4E+

T=B;' <) M'=SUR'S OF S'P=R=TIO/ OF '=.9

=;T'R/=TI>' SO;UTIO/

S iM

4+)+++4 S i

−

4+)+++4:*

S iM

*+)+++*+* S i

−

*+)+++44<

S iM

8+)+++44E S i

−

8+)+++*48

S iM

:+)+++*:< S i

−

:+)+++4+C

The result o" the ran%ing o" approa#hes is deri&edusing '7uations KL KTable L) The third alternati&e is

#onsidered as the best ma2imi6ation o" e2pe#ted bene"its"or the seller to #on#entrate the business resour#es andstrengthen ad&ertising strategy)

T=B;' ) R 'SU;TS OF .;OS'/'SS .O'FFI.I'/T =/0 R=/

Re&enue type RC Ran%

under <+ million +):4*4 *<+ million1<++ million +)8:4E8 8

<++ million1<$+++ million +):+8+* 4abo&e <$+++ million +)8+<++ :

>) .on#lusions

This study "ound that in "ood industry$ the per#eptiono" the buyer1seller relationship is #omple2 and the

#omple2ity is espe#ially re"le#ted in the aspe#ts o" #ommuni#ation) hen the seller uses #oer#i&e power$ the

buyer tends not to display strong #ommuni#ation) Thisin#reases the #hannel satis"a#tion o" the buyer with theseller and the buyer?s e2pe#tation o" maintaining a long-

term #ollaborati&e relationship with seller) The ran%ingresult by TOPSIS pointed out that the third alternati&e isstrategi#ally optimum "or the seller) The best options "or #oer#i&e power$ #ommuni#ation #ost$ e#onomi# and non-e#onomi# satis"a#tion appeared "or the #ompanies withre&enues o" <++1<+++ million) There"ore$ the sellers must#ontinuously adDust their resour#es to in#rease thenumber o" optimal buyers to ma2imi6e mutual bene"its)The "ollowing study #an strengthen the lin% betweenstrategy and management through other approa#hessimilar to the TOPSIS method)

Re"eren#es

345 B) Ramaseshan$ ;) S) .) Yip and ) 9) Pae$ Power$satis"a#tion$ and relationship #ommitment in.hinese store-tenant relationship and their impa#ton per"orman#e) Journal of Retailing $ &ol)C*$ no)4$

pp)8-,+$ *++)3*5 M) ) San6o$ M) ;) Santos$ R) >67ue6 and ;) I)

l&are6$ The e""e#t o" mar%et orientation on buyer-seller relationship satis"a#tion$ Industrial

Marketing Management $ &ol)8*$ no):$ pp)8*,-8:<$

*++8)385 !) 9) >) Bruggen$ M) a#%er and .) /ieuwlaat$The impa#t o" #hannel "un#tion per"orman#e on

buyer-seller relationships in mar%eting #hannels$ International Journal of research in Marketing $&ol)**$ pp)4:4-4<C$ *++<)

3:5 ) Yoon and .) ;) 9wang$ Multiple attribute

decision making Methods and applications a

state!of!the!art surve") !ermany( Springer->erlag$4EC4)

3<5 Y) ) ;ai$ T) Y) ;iu and .) ;) 9wang$ TOPSIS "or MO0M$ #uropean Journal of $perational

Research$ &ol),$ pp):C-<++$ 4EE:)

35 ;) ) Stern$ =) I) 'l-=nsary and =) T) .oughlan$ Marketing Channels) /ew ersey( Prenti#e 9all$4EE)

3,5 .) ;ages$ .) R) ;ages and ;) F) ;ages$ TheR';VU=; s#ale( a measure o" relationship 7ualityin e2port mar%et &entures$ Journal of %usiness

Research$ &ol)<C$ no)C$ pp)4+:+-4+:C$ *++<)3C5 I) !eys%ens and -B) ') M) Steen%amp$ '#onomi#

and so#ial satis"a#tion ( Measurement and rele&an#eto mar%eting #hannel relationships$ Journal of

Retailing $ &ol),$ no)4$ pp)44-8*$ *+++)3E5 F) Selnes$ =nte#edents and #onse7uen#es o" trust

and satis"a#tion in buyer1seller relationships)

#uropean Journal of Marketing& &ol)8C$ no)8J:$ pp)8+<-8**$ 4EEC)34+5 !) huang$ Y) Qi and =) S) ; ) Tsang$ Power$

#on"li#t and #ooperation( The impa#t o" guan2i in

8J<



.hinese mar%eting #hannels$ Industrial Marketing

Management$ &ol)8E$ pp)48,-4:E$ *+4+)3445 I) R) B) RodrGgue6$ ) .) =gudo and 9) S) M)

!utiHrre6$ 0eterminants o" e#onomi# and so#ialsatis"a#tion in manu"a#turer-distributor

relationships$ Industrial Marketing Manage'$&ol)8<$ pp)-,<$ *++)

34*5 !) R) ahanshahloo$ F) 9ossein6adeh ;ot"i and =)R) 0a&oodi$ '2tension o" TOPSIS "or de#ision-ma%ing problems with inter&al data( inter&ale""i#ien#y$ Mathematical and Computer Modelling $&ol):E$ pp)448,144:*$ *++E)

:J<



*eng+i -u was born in Taipei on =pril 4+ o" 4EE) Theedu#ational ba#%ground is 0o#toralStudent at the !raduate Institute o" Management S#ien#es$ Tam%angUni&ersity$ Tamsui 0ist)$ /ew Taipei.ity) The #urrent Dob is =dDun#tInstru#tor with the 0epartment o" Mar%eting and ;ogisti#s Management$.hihlee Institute o" Te#hnology$ Ban#ial0ist)$ /ew Taipei .ity) The maDor "ieldo" study is mar%eting and management)

)hung+)hu )huang was born in aohsiung on February 4 o" 4E<,) The edu#ational ba#%ground is Ph)0at !raduate Institute o" ManagementS#ien#es$ Tam%ang Uni&ersity$ Tamsui0ist)$ /ew Taipei .ity) 9is #urrent Dob is pro"essor and #hairman o" !raduateInstitute o" Management S#ien#es$Tam%ang Uni&ersity$ Tamsui 0ist)$ /ew

Taipei .ity) 9is maDor "ield o" study is"inan#ial and management)

<J<

2013_iciim_the optimal relationship between buyer and seller-using topsis method

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