Document Type

Closed Project

Publication Date

Spring 2004


Dundar Kocaoglu

Course Title

Decision Making in Engineering and Technology Management

Course Number

EMGT 530/630


Contracting out -- Management -- Case studies, Decision support systems, Hierarchical decision model, Decision making, Technology -- Management


The focus of this project was mainly on the decision-making process associated with sourcing of technological knowledge by firms for selecting appropriate vendors. Technological knowledge sourcing has become an important phenomenon as firms have come to realize that they can no longer solely rely on in-house technological and knowledge capacity to generate new products and processes. Firms therefore, increasingly have to confront the problem of how to decide on vendors for sourcing their work. The growth in technological sourcing is reflected by choosing the right vendors. The decision involves in the selection of IT vendors are complex and complicated. The tools of quantitative decision-making can help generate decisions and break down complex structures, enabling the decision maker to make better decisions. Our team applied the decision-making tools taught in class to the real world situation of selecting vendors. This was a large, multicriteria problem. There are criteria such as cost, performance, confidentiality, corporate culture and so on. Clearly a decision making model in assisting firms in their evaluation would be of great necessity in appropriate vendors selections. For our term project, we’ve developed a base hierarchical decision model to evaluate vendor selection as it relate to IT application outsource. The team’s first task was to decide which criteria could be used and why. Once criteria were selected, the problem was decomposed into four-tier hierarchical decision model. We use the pair wise comparison (using PCM software) by experts at each level. An Interactive Excel database, developed by our team, was used for the calculation of each weight in each level. The base outsourcing model displays the selection of the best vendor. The model is tested using different scenarios to verify that the vendor selected met the requirements.


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This project is only available to students, staff, and faculty of Portland State University

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