An Automated Selecting Subcontractor Model In E-Commerce by Pao-Hung Lin
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1 A Automated Selectg Subcotractor Model I E-Commerce by Pao-Hug L Asst. Prof., Dept. of Cvl Egeerg, Feg-Cha Uversty, Tachug, Tawa E-mal: paol@fcu.edu.tw Abstract: From the observato of orgazato chages dgtal ecoomy, the features of orgazato expaso from ts cocetrated kerel to the globalzed e-commerce scope s detfed to rebuld the relatoshps ad coectos betwee the whole subcotractg supply cha for costructo projects. A automated subcotractg selecto model s proposed ad the fal decso-makg for selecto wll be approached by Multple Attrbute Utlty Theory. Followg ths methodology, t ca be expected to brg the excellet decso support to full play for the selecto of subcotractors. KEYWORDS: utlty theory, e-commerce, subcotract, decso-makg. INTRODUCTION Kowledge-based ad etworked characterstcs shape the all ew formato era the dgtal ecoomy. Electroc Commerce (e-commerce has bee the symbol of eterprse actvtes dgtal tme. The force of vrtualzato ad vrtual market costtutes the heart of e-commerce the dgtal ecoomy. The ature of e-commerce s to buld the ovato of compettve advatage betwee eterprses by way of web coecto, to alter the operato process ad to ehace the effcecy of orgazato. Dgtzato ot oly mproves the formato ualty ad eables teractvty, but also provdes a powerful approach for maagemet may respects. The ew ecoomy s creatg a reformato of coflctg drvers causg every eterprse every dustry to rethk ts compettve advatage, to rebuld ts system of value cha, ad to restructure ts orgazato patter. All the tradtoal thkg way to commucato or trasacto s facg the uprecedeted challeges to shft. Tapscott (996 poted that the result of ths shft from physcal to vrtual does ot smply reduce redudacy ad speed up commucato. Rather, the substatal chages the essece of huma ad orgazatoal commucato occur. Iter-eterprse computg s causg ew ecoomc dyamcs the followg ways: accessblty of parters, ew terdepedece, terorgazatoal metabolsm, cooperatve compettveess, ad terorgazato value creato. Through the coecto of formato etwork, the resources are dstrbuted ad values are geerated the boudless vrtual marketplace. Due to the sharp dffereces betwee the vrtual market trasacto atmosphere the post-formato era ad the tradtoal physcally ecoomc market, major mpact are certa to occur wth tradtoal ma cotractor ad subcotractor relatos. The processes of these chage, ad whether they wll completely alter prevous subcotractg relatoshps ad models s a topc worthy of further research ad cosderato. From comparsos of the costructo dustry wth the maufacturg dustry or other productos that have goe through relatvely lttle the way of developg IT evromet, t s ute clear that, based o the deas of e-commerce ad the mportato of practcal methods, the future t wll be possble to mprove o abuses that arse tradtoal costructo dustry busess processes. Although t s crucal to select approprate subcotractors to mplemet specfc costructo project, few research really touched the selecto techues ad methodologes ad exteded further to the coecto of overall supply cha. Therefore, what the fluece to
2 the whole subcotractg supply cha of the research s cocer ths dgtal ecoomy s aalyzed from the ew vso of ecoomcs of electroc commerce. The ew trasacto mechasm s shapg dgtal ecoomy ad all the treds ad propertes exstg the ompreset evromet have resulted great chage of orgazatoal structure ad the ature of trasacto, ad eve paradgm shft. 2. METHODOLOGY The methodology of ths research s fouded o the observato of e-commerce ecoomcs as well as etworkg mechasm ad put the problem ceter of subcotractg supply cha maagemet or the combato of subcotractors. The major sgfcace of ths methodology s to support the acusto of optmal selecto set from myrad subcotractg combatos for specfc costructo project. All the bddg formato ad decso are mplemeted through ompreset Iteret. Every clet user eeds oly to ope ther web browser to use the system's capabltes to retreve all of the eeded formato ole. The archtecture of data trasformato ca be show as Fgure. Further, ths methodology s proposed by takg advatage of the portfolo theory of vestmet choce uder codtos of ucertaty o the mea ad the varace of the dstrbutos of returs to approach the selecto model of subcotractors costructo project. That s, the rsky coecto whole supply cha wll be cosdered ad obvously the proft wll o loger be the oly factor to the decso-makg of bdder selecto as the tradtoal bddg strategy. Ad most mportatly, the factor that must be take to cosderato electroc bddg system s how to provde a compatble evromet ad servces meetg the eeds of all partcpatg eterprses of the global market a tmely ad sharg maer. Ths methodology also exteds the decso maer of two factors of portfolo theory to multple attrbute decso-makg order to be edowed wth potetal for ecompassg all the possble factors of fluece to selecto. The fal selecto wll be depedet o the rsk preferece of decso-maker by the utlty fucto. Comprehesvely, the methodology s eclosed by the teret-based formato techology as the demostrato of Fgure 2.. NETWORKING MECHANISM I retrospecto of the developmet of commercal orgazato, there ca be classfed as fucto oreted, departmet oreted, ad the matrx type tradtoal orgazato categores (Mles ad Sow, 992. Nevertheless, "etworkg" has bee the ma research focus maagemet feld ad the tred to the applcato of realty. There are may dfferet deomatos to terpret the remold orgazato, such as Peter Drucker's (998 "Networked Orgazato," Peter Sege's "Learg Orgazato," Kee's (99 "Relatoal Orgazato" ad Davdow ad Maloe's (992 "Vrtual Orgazato. They all put emphass o the relatoal etwork betwee members of orgazato. No matter what the dea of etworkg terpreted from the vew pot of resource depedece (Joaso ad Mattsso, 987, trasacto cost (Wllamso, 975; Olver, 990, or strategc allace (Porter ad Fuller, 987, the essece of etworkg les o that the specfc eterprse ca cocetrate o the most valuable actvtes wth compettve advatages, to reach the ecoomes of scale ad obta the beeft of work specalzato (Porter, 985. The etworked orgazato opes a ew style ad feature the area of orgazato structure ad strategc maagemet, revves the tradtoal orgazato patter (Mles ad Sow, 992, ad provdes the alteratves except vertcal tegrato as well as dversfcato. From the vestgato ad observato of the evolutoary process tradtoal orgazato relatoshp, t ca be foud that the formato etwork s deed playg a very crucal role to push the chages ad vrtualzato (Tag, 998. Fgure represets the process of orgazato developmet uder both the coordate axes of relato etwork ad formato etwork. It demostrates the features of orgazato expaso from ts lmted kerel, partershp, vertcal tegrato, outsourcg to the e-commerce global scope accordg wth the developg formato etwork, ad smultaeously expresses the vrtualzed evoluto of orgazato relatoshp. Also, the correspodg space-tme stuato of ths research s cocers are located o the relato plae to show the focus of the preset model. Addtoally ad mportatly, ths research s ot 2
3 oly focusg o the explorato of the formg of vrtual orgazato, but o the searchg of the proft-base ad effcecy to mprove the lk of selectg subcotractors by observg the orgazato chages dgtal ecoomy. 4. THE PRESENT CONCEPTUAL MODEL The proposed selecto model takes three ma attrbutes to subcotractg cosderato, amely, the expected retur (ERN, the plaed performace dsperso (PPD, ad the comprehesve rsk dex (CRI. The expected retur ad the plaed performace dsperso are the leadg roles ad have bee exactly dscussed by Tserg ad L. Ths research, the comprehesve rsk dex s to tegrate the bdder s credt degree ad uotato devato (cludg teder prce ad durato to expasvely cosder the correlato betwee subcotractors the specfc combato of costructo project. I the cocrete, the CRI s a represetatve evaluato dex composed by three kds of ucertatyα j,β j, adγ, whereα j s the measuremet of dspersed degree of uoted durato for subcotractor to the market value the bddg of specfc subproject j ; β j s the measuremet of dspersed degree of uoted prce for subcotractor to the market value specfc subproject j ; ad γ s the credt ratg for subcotractor evaluated by the geeral cotractor advace. Expressed euato form ad take the absolute value umerator to elmate the egatve stuato, t shows that Q D µ j D j α j = ( e σ D j whch QD j s the uoted durato of subcotractor the bddg of specfc subproject j ; µ D j s the mea value of all uoted durato bddg market for specfc subproject j ; σ D j s the stadard devato of all uoted durato bddg market for specfc subproject j. I the same way, β j ca be obtaed. The preset model deomates the comprehesve ucertaty of (α β γ as uasσ, compared wth the physcal varace σ 2 of specfc asset returs portfolo theory. Thus, t ca be expressed as followg euato σ =α β γ (e-2 dex CRI ca be expressed as CRI = x + 2 x x j j ( e j > = where the proporto coeffcet x portfolo theory, here represets the weght factor whch s eual to the rato of the uoted prce of specfc subcotractor or j to the uoted summato of the whole selected combato; adρ j s the coeffcet of correlato betwee subcotractor ad j. The preset coceptual model combed three attrbutes s depcted as Fgure 4 the space costructed by ERN, PPD, ad CRI three dmesos. Straghtly, the cocept model s adheret to the two-attrbute model of portfolo selecto to demostrate t -D space. However, t s ute dfferet ad much more complcated to fd the soluto betwee the utlty fucto surface ad odomated froter surface -D space tha t s the 2-D space. As a matter of fact, the mathematcal costructo of utlty fucto surface ad odomated froter surface s a very dffcult task. Therefore the preset model wll take the multattrbute utlty theory to search for the fally optmal selecto for decso-makg. 5. DECISION-MAKING MODEL As stated relevat lterature, multattrbute utlty theory evaluates utlty fuctos teded to accurately express a decso-maker s outcome prefereces terms of multple attrbutes. It really reduces the complex problem of assessg a multattrbute utlty fucto to oe of assessg a seres of udmesoal utlty fuctos. Accordgly, the three cocered attrbutes of ERN, PPD, ad CRI the preset model are dvdually apprased by the preferece of decso-maker. From Keeey s (99 theorem, uder the assumpto of mutual preferetal depedece ad mutual utlty depedece of the three attrbutes, the utlty fucto ca be expressed as ether the multplcatve fucto or the addtve fucto. That s, the followg euatos: j 2 2 = x + 2 x x j ρj j ( e 4 j > = j From portfolo theory, the comprehesve rsk
4 U U obj obj = [ ( + kku ( x ]/ k, k or = ku ( x, k = ( e 5 ( e 6 where U obj s the objectve fucto of utlty; k s the scalg costat; ad u(x s the dvdual utlty fucto for each attrbute. The three attrbutes decso-makg wll also be ormalzed to satsfy wth the codto that the summato of all weghted scalg costats s eual to oe. Exactly, the addtve utlty fucto of Euato 2 s held the preset model to formulate the objectve fucto: Maxmze U obj = ku ( x, k = ( e 7 The maxmum utlty value mples the optmal selecto for the combato of subcotractors. The soluto for Euato s ecessary to decde the scalg costats ad dvdual utlty fuctos. The method of determg weghts addtve utlty models cludes multvarate lear (MLR or o-lear regresso aalyss, aalytcal herarchy process (AHP, drect decomposed tradeoffs ad so o (Schoemaker ad Wad, 982. I geeral, t ca be separated to statstcal versus subjectve approaches. For smplcty ad practcal purposes, the preset operato o weghts wll thoroughly leave to the arbtrary settg by the decso-maker. More, the sestvty aalyss wll be tested to evaluate the chagg flueces of each weght. Coseuetly, the procedures for assessg dvdual utlty fuctos uuestoably become the most sgfcat key pot the preset model. Utlty theory assumes that a decso-maker ca choose amog the alteratves avalable to the dvdual to meet the maxmum satsfacto degree dvdual preferece. Ths ca be certaly mpled the dvdual s aware of those alteratves ad s capable of evaluatg them through utlty fucto. Moreover, relatve to a seres of objectves t s assumed all formato belogg to the varous levels of the objectves ca be captured by a dvdual s utlty fucto. I effect, a utlty fucto s smply a mappg of the values the rage of a attrbute to a cardal worth scale ad ca be stated as a formal, mathematcal represetato of dvdual preferece structure. Thus f a dvdual coforms to specfc axoms, a utlty fucto ca be costructed. Utlty fuctos have bee used extesvely cosumer demad theory ad ecoomcs, ad they have bee appled to prvate ad publc decso-makg problems (Gocoechea et al., 982. For multobjectve problems utlty fuctos ca completely order the set of odomated objectves. The odomated soluto whch yelds the hghest utlty s referred to as the best-compromse soluto. 6. CONCLUSION The preset model system s costructed uder the teret-based evromet. All the partcpats ths system are ecessarly provded wth the basc reuremets ad fuctos for web-usage. I other words, the tal vestmet to buld up a sutable etworkg evromet s dspesable to ths system. Uder the curret developg evromet, the testg case had ever bee completely dealt wth a few mutes to provde decso-makg support followg ths methodology. Although t s very dffcult to evaluate the precsely uattatve beeft ad ecoomc effcecy betwee the tradtoal way to subcotract ad the preset methodology, t ca be greatly expected to reduce the overall amout of tme ad captal reured for the complcated process of procuremet. Above of all, t apparetly ehaces the potetal ablty to maxmze the preferred degree of decso maker s utlty a scetfc maer. I spte that the system performace s hghly depedet o the computg complexty of rasg problems ad t wll also be compressed by the badwdth capacty as well as the flow of web trasportato thereupo, evertheless, the preset model deed brgs excellet decso support to full play for the selecto of subcotractors. REFERENCES. Davdow, W. H. ad Maloe, M. S., The 4
5 Vrtual Corporato, Harper Colls Publshg, N.Y., Drucker, P. E., The Comg of the New Orgazato, Harvard Busess Revew, Vol. 66, No., 988, pp Gocoechea, A,, Hase, D. R. ad Duckste, L., Multobjectve Decso Aalyss wth Egeerg ad Busess Applcatos, Wley Publshg, New York, Johasso, J. ad Mattsso, L. G., Iter-orgazatoal Relatos Idustral System: A Network Approach Compared wth the Trasacto-Cost Approach, Iteratoal Studes of Maagemet ad Orgazato, Vol. 7, No., pp. 4-48, Keeey, R. L. ad Raffa, H., Decsos wth Multple Objectves: Prefereces ad Value Tradeoffs, Cambrdge Uversty Press, , pp Olver, E. C., Determat of Iter-orgazatoal Relatoshps: Itegrato ad Future Drectos, Academy of Maagemet Revew, Vol. 5, No. 2, 990, pp Tag, H. C., Study of Costructo of Vrtual Orgazato Model From Network Perspectve, Example: the Electrocs ad Iformato Idustres, Ph.D. Dssertato, Graduate School of Busess, Natoal Tawa Uversty, Tapscott, D., The Dgtal Ecoomy: Promse ad Perl the Age of Networked Itellgece, McGraw-Hll, N.Y., Tserg, H. P. ad L, P. H., A Accelerated Subcotractg Ad Procurg Model for Costructo Projects, Iteratoal Joural of Automato Costructo, 2002, pp Fgure. Archtecture ad Data Trasformato of the Preset Model 6. Kee, P. G. W., Shapg the Future: Busess Desg through Iformato Techology, Harvard Busess School Press, Mles, R. E. ad Sow, C. C., Cause of Falure Network Orgazatos, Calfora Maagemet Revew, Vol. 5, 5
6 Vrtualzed Fgure 2. Methodology of The Preset Model Relato Network Global Market * ASAP Trasacto Market Strategc Allaces Relatos Cotract Vertcal Itegrato Quas-frm Boudary Partershp Kerel Eterprse Groupware/ Itraet Electroc Marketplace Extraet/ EDI Process Itegrato Electroc Commerce Exteso * ASAP Iteret Iformato Network The preset Model focus Note: Modfed from Kosysk (99 Fgure. Evoluto of Orgazato Type Uder Networkg Mechasm Optmal Selecto Expected Retur (ERN Utlty Fucto Surface Nodomated Froter Soluto Surface Plag Performace Dsperso (PPD Comprehesve Rsk Idex (CRI Fgure 4. The Expresso for Coceptual Model 6
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