Combining Total Cost of Ownership and Multi-Criteria Decision Analysis to Improve Cost Management in Family Farming
Abstract
:1. Introduction
2. State of the Art
2.1. Cost Management and TCO in Family Farming
2.2. Multi-Criteria Methods Applied in Agribusiness
3. Materials and Methods
4. Analysis of Results
4.1. Phases 1 to 4—Defining preferences, objectives and constraints, and evaluation criteria
4.2. Phase 5—TCO-based and Multi-criteria Decision Model
4.3. Phase 6—Ranking of the Suppliers Using the Multi-Criteria MABAC Method
5. Discussion
6. Conclusions
Supplementary Materials
Author Contributions
Funding
Acknowledgments
Conflicts of Interest
References
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Categories | Authors |
---|---|
Suppliers and Components | [20,21,22,23,24,25,26,27,43,44] |
Services | [38,39] |
Equipment and Processes | [31,36,37,40,45,46] |
Rank | Criteria | Dimension | Characteristic | Weight |
---|---|---|---|---|
1 | Product Price | Acquisition | Monetary | 4.34% |
2 | Discounts | Acquisition | Monetary | 4.01% |
3 | Efficiency | Utilization | Monetary | 3.84% |
4 | Durability | Utilization | Monetary | 3.81% |
5 | Transportation | Reception | Monetary | 3.68% |
6 | Price Evolution | Acquisition | Monetary | 3.58% |
7 | Interest of Purchase | Buying behaviour | Monetary | 3.43% |
8 | Unloading | Reception | Monetary | 3.35% |
9 | Taxes | Acquisition | Monetary | 3.33% |
10 | Failures | Utilization | Non-Monetary | 3.14% |
11 | Replacement | Utilization | Monetary | 3.13% |
12 | Failures | Utilization | Non-Monetary | 3.12% |
13 | Reception | Reception | Non-Monetary | 3.05% |
14 | Quotation | Acquisition | Non-Monetary | 3,00% |
15 | Contract | Acquisition | Non-Monetary | 2.89% |
16 | Billing | Reception | Non-Monetary | 2.89% |
17 | Maintain stock | Ownership | Monetary | 2.85% |
18 | Time | Ownership | Non-Monetary | 2.85% |
19 | Checking | Reception | Monetary | 2.82% |
20 | Adaptations | Utilization | Non-Monetary | 2.78% |
21 | Price small quantities | Buying behaviour | Monetary | 2.76% |
22 | Accompaniment | Acquisition | Non-Monetary | 2.75% |
23 | Quality tests | Reception | Monetary | 2.75% |
24 | Waste recovery | Disposal | Monetary | 2.73% |
25 | Maintenance | Utilization | Non-Monetary | 2.70% |
26 | Litigation | Reception | Non-Monetary | 2.67% |
27 | Discards | Disposal | Monetary | 2.65% |
28 | Installation | Utilization | Monetary | 2.65% |
29 | Large Quantities | Buying behaviour | Monetary | 2.64% |
30 | Interest | Acquisition | Monetary | 2.53% |
31 | Training | Utilization | Non-Monetary | 2.46% |
32 | Quality | Utilization | Monetary | 2.43% |
33 | Tech. assistance by supplier | Buying behaviour | Non-Monetary | 2.39% |
100.00% |
Criteria | Abbreviation | Characteristic | Description | Unit of Measurement | Example |
---|---|---|---|---|---|
1. Product Price | PPR | Monetary | Price of the product, informed by suppliers | Value (USD) | Monetary value (USD) |
2. Discount | DIS | Monetary | Reduction on the price, offered as a differential for sales | Value (USD) | Percentage (%) based on quantity purchased |
3. Efficiency | EFF | Monetary | Cost necessary to maintain efficiency of operations | Cost Value (USD) | Training and stocking costs |
4. Durability | DUR | Monetary | Cost to guarantee the durability of the products | Cost Value (USD) | Storage and setting costs |
5. Transportation | TRC | Monetary | Sum of transportation costs of products | Value (USD/per un.) | Fuel, maintenance and time costs |
6. Price Evolution | PEV | Monetary | Difference of product price in a period of time | Value (USD) in 30 days | Periodic increasing of prices, taxes, or fees |
7. Production Fails | CPRF | Non-Monetary | Score of relevance for costs related to production failure | Intensity (Saaty scale) | Failure that causes production losses |
8. Failures | CPF | Non-Monetary | Score of relevance for costs related to product failure | Intensity (Saaty scale) | Failure that causes monetary losses |
9. Reception | COR | Non-Monetary | Score of relevance for costs related to activities related to the reception of products | Intensity (Saaty scale) | Special place to storage the products |
10. Quotation | CQO | Non-Monetary | Score of relevance for costs related to price quotation activities | Intensity (Saaty scale) | People assigned to realize quotation activities |
11. Contract | CCO | Non-Monetary | Score of relevance for costs related to contracts management activities | Intensity of risk (Saaty scale) | People assigned to realize contracts management activities |
12. Technical Assistance Offered by the Supplier | TAS | Non-Monetary | Existence or absence of free technical assistance offered by the supplier | Existent or Not Existent | Free training on the use of the product |
Criteria/ Alternatives | Product Price | Discount | Efficiency | Durability | Transportation | Price Evolution | Production Fails | Failures | Reception | Quotation | Contract | Technical Assistance |
---|---|---|---|---|---|---|---|---|---|---|---|---|
Abbreviation | PPR | DISC | EFF | DUR | TRC | PEV | CPRF | CPF | COR | CQO | CCO | TAS |
Unit | USD | USD | USD | USD | USD | USD | score | score | score | score | score | Y/N |
S-1 | 20.0 | 0.00 | 1.22 | 0.50 | 0.00 | 0.40 | 3 | 1 | 3 | 1 | 3 | 1 |
S-2 | 21.3 | 0.21 | 1.30 | 0.53 | 0.10 | 0.25 | 3 | 3 | 3 | 1 | 3 | 1 |
S-3 | 20.4 | 0.20 | 1.24 | 0.51 | 0.00 | 0.20 | 3 | 3 | 3 | 1 | 3 | 0 |
S-4 | 21.0 | 0.31 | 1.28 | 0.53 | 0.00 | 0.00 | 7 | 5 | 3 | 1 | 5 | 0 |
S-5 | 20.3 | 0.00 | 1.24 | 0.51 | 0.40 | 0.20 | 5 | 5 | 3 | 5 | 3 | 1 |
S-6 | 20.0 | 0.00 | 1.22 | 0.50 | 0.50 | 0.00 | 5 | 5 | 3 | 3 | 3 | 1 |
S-7 | 20.5 | 0.00 | 1.25 | 0.51 | 0.50 | 0.25 | 7 | 5 | 5 | 3 | 3 | 0 |
S-8 | 20.8 | 0.00 | 1.27 | 0.52 | 0.50 | 0.42 | 5 | 3 | 5 | 3 | 3 | 0 |
S-9 | 19.5 | 0.19 | 1.19 | 0.49 | 0.50 | 0.00 | 3 | 3 | 3 | 5 | 1 | 1 |
S-10 | 20.4 | 0.20 | 1.24 | 0.51 | 0.00 | 0.00 | 3 | 3 | 3 | 5 | 3 | 1 |
S-11 | 20.0 | 0.00 | 1.22 | 0.50 | 0.30 | 0.00 | 3 | 1 | 3 | 3 | 3 | 1 |
Criteria/ Alternatives | Product Price | Discount | Efficiency | Durability | Transportation | Price Evolution | SUM | Ranking |
---|---|---|---|---|---|---|---|---|
Abbreviation | PPR | DISC | EFF | DUR | TRC | PEV | ||
Unit | USD | USD | USD | USD | USD | USD | USD | |
S-1 | 20.00 | 0.00 | 1.22 | 0.50 | 0.00 | 0.40 | 22.12 | 4th |
S-2 | 21.30 | −0.21 | 1.30 | 0.53 | 0.10 | 0.25 | 23.27 | 10th |
S-3 | 20.40 | −0.20 | 1.24 | 0.51 | 0.00 | 0.20 | 22.15 | 5th |
S-4 | 21.00 | −0.31 | 1.28 | 0.53 | 0.00 | 0.00 | 22.50 | 7th |
S-5 | 20.30 | 0.00 | 1.24 | 0.51 | 0.40 | 0.20 | 22.65 | 8th |
S-6 | 20.00 | 0.00 | 1.22 | 0.50 | 0.50 | 0.00 | 22.22 | 6th |
S-7 | 20.50 | 0.00 | 1.25 | 0.51 | 0.50 | 0.25 | 23.01 | 9th |
S-8 | 20.80 | 0.00 | 1.27 | 0.52 | 0.50 | 0.42 | 23.51 | 11th |
S-9 | 19.50 | −0.19 | 1.19 | 0.49 | 0.50 | 0.00 | 21.49 | 1st |
S-10 | 20.40 | −0.20 | 1.24 | 0.51 | 0.00 | 0.00 | 21.95 | 2nd |
S-11 | 20.00 | 0.00 | 1.22 | 0.50 | 0.30 | 0.00 | 22.02 | 3rd |
Criteria/ Alternatives | Production Fails | Failures | Reception | Quotation | Contract | Technical Assistance | Ranking |
---|---|---|---|---|---|---|---|
Abbreviation | CPRF | CPF | COR | CQO | CCO | TAS | |
Weight | 16.66% | 16.67% | 16.67% | 16.67% | 16.67% | 16.66% | |
Unit | Score | Score | Score | Score | Score | Y/N | |
S-1 | 3 | 1 | 3 | 1 | 3 | 1 | 1st |
S-2 | 3 | 3 | 3 | 1 | 3 | 1 | 2nd |
S-3 | 3 | 3 | 3 | 1 | 3 | 0 | 3rd |
S-4 | 7 | 5 | 3 | 1 | 5 | 0 | 10th |
S-5 | 5 | 5 | 3 | 5 | 3 | 1 | 9th |
S-6 | 5 | 5 | 3 | 3 | 3 | 1 | 7th |
S-7 | 7 | 5 | 5 | 3 | 3 | 0 | 11th |
S-8 | 5 | 3 | 5 | 3 | 3 | 0 | 8th |
S-9 | 3 | 3 | 3 | 5 | 1 | 1 | 5th |
S-10 | 3 | 3 | 3 | 5 | 3 | 1 | 6th |
S-11 | 3 | 1 | 3 | 3 | 3 | 1 | 4th |
Alternatives | Ranking Monetary (RM) | Ranking Non-Monetary (RE) | Final Ranking by Average RM and RE |
---|---|---|---|
S-1 | 4th | 1st | 1st |
S-2 | 10th | 2nd | 6th |
S-3 | 5th | 3rd | 5th |
S-4 | 7th | 10th | 8th |
S-5 | 8th | 9th | 9th |
S-6 | 6th | 7th | 7th |
S-7 | 9th | 11th | 11th |
S-8 | 11th | 8th | 10th |
S-9 | 1st | 5th | 2nd |
S-10 | 2nd | 6th | 4th |
S-11 | 3rd | 4th | 3rd |
ATTRIBUTES OF DIMENSION ACQUISITION | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Product Price | Discount | Price Evolution | Interest of Purchase | Taxes | Quotation | Contract | Accompaniment | SRows | Score | Weights | |
Yi= wj*(100 + Z) | |||||||||||
Product Price | 1.00 | 4.00 | 4.00 | 4.00 | 4.00 | 4.00 | 4.00 | 5.00 | 30.00 | 24.74 | 15.91% |
Discount | 0.25 | 1.00 | 3.00 | 4.00 | 4.00 | 4.00 | 4.00 | 4.00 | 24.25 | 22.86 | 14.71% |
Price Evolution | 0.25 | 0.33 | 1.00 | 2.00 | 2.00 | 3.00 | 3.00 | 3.00 | 14.58 | 20.32 | 13.07% |
Interest of Purchase | 0.25 | 0.25 | 0.50 | 1.00 | 2.00 | 3.00 | 3.00 | 3.00 | 13.00 | 19.53 | 12.56% |
Taxes | 0.25 | 0.25 | 0.50 | 0.50 | 1.00 | 3.00 | 3.00 | 3.00 | 11.50 | 18.94 | 12.19% |
Quotation | 0.25 | 0.25 | 0.33 | 0.33 | 0.33 | 1.00 | 2.00 | 2.00 | 6.50 | 17.00 | 10.94% |
Contract | 0.25 | 0.25 | 0.33 | 0.33 | 0.33 | 0.50 | 1.00 | 2.00 | 5.00 | 16.42 | 10.56% |
Monitoring | 0.20 | 0.25 | 0.33 | 0.33 | 0.33 | 0.50 | 0.50 | 1.00 | 3.45 | 15.63 | 10.06% |
SColumns | 2.70 | 6.58 | 10.00 | 12.50 | 14.00 | 19.00 | 20.50 | 23.00 | 155.44 | 100.00% | |
Z = SRows − SColumns | 27.30 | 17.67 | 4.58 | 0.50 | −2.50 | −12.50 | −15.50 | −19.55 |
GLOBAL DIMENSIONS | |||||||||
---|---|---|---|---|---|---|---|---|---|
Acquisition | Reception | Ownership | Utilization | Disposal | Buying Behaviour | SRows | Score Yi = 100 + Z | Weights | |
Acquisition | 1.00 | 4.00 | 3.00 | 3.00 | 4.00 | 4.00 | 19.00 | 116.58 | 19.43% |
Reception | 0.25 | 1.00 | 2.00 | 2.00 | 2.00 | 3.00 | 10.25 | 103.42 | 17.24% |
Ownership | 0.33 | 0.50 | 1.00 | 0.50 | 2.00 | 2.00 | 6.33 | 97.33 | 16.22% |
Utilization | 0.33 | 0.50 | 2.00 | 1.00 | 3.00 | 3.00 | 9.83 | 102.67 | 17.11% |
Disposal | 0.25 | 0.50 | 0.50 | 0.33 | 1.00 | 2.00 | 4.58 | 92.08 | 15.35% |
Buying behaviour | 0.25 | 0.33 | 0.50 | 0.33 | 0.50 | 1.00 | 2.92 | 87.92 | 14.65% |
SColumns | 2.42 | 6.83 | 9.00 | 7.17 | 12.50 | 15.00 | 600.00 | 100.00% | |
Z = SRows − SColumns | 16.58 | 3.42 | −2.67 | 2.67 | −7.92 | −12.08 |
Criteria/Alternatives | Product Price | Discount | Efficiency | Durability | Transportation | Price Evolution | Production Fail | Failures | Reception | Quotation | Contract | Technical Assistance |
---|---|---|---|---|---|---|---|---|---|---|---|---|
Weight (%) | 10.65 | 9.84 | 9.42 | 9.34 | 9.00 | 8.75 | 7.7 | 7.64 | 7.47 | 7.32 | 7.07 | 5.8 |
Abbreviation | PPR | DISC | EFF | DUR | TRC | PEV | CPRF | CPF | COR | CQO | CCO | TAS |
Unit | USD | USD | USD | USD | USD | USD | score | score | score | score | score | Y/N |
Direction | Bnf. | Cost | Bnf. | Bnf. | Bnf. | Bnf. | Bnf. | Bnf. | Bnf. | Bnf. | Bnf. | Cost |
S-1 | 20.00 | 0.00 | 1.22 | 0.50 | 0.00 | 0.40 | 3 | 1 | 3 | 1 | 3 | 1 |
S-2 | 21.30 | 0.21 | 1.30 | 0.53 | 0.10 | 0.25 | 3 | 3 | 3 | 1 | 3 | 1 |
S-3 | 20.40 | 0.20 | 1.24 | 0.51 | 0.00 | 0.20 | 3 | 3 | 3 | 1 | 3 | 0 |
S-4 | 21.00 | 0.31 | 1.28 | 0.53 | 0.00 | 0.00 | 7 | 5 | 3 | 1 | 5 | 0 |
S-5 | 20.30 | 0.00 | 1.24 | 0.51 | 0.40 | 0.20 | 5 | 5 | 3 | 5 | 3 | 1 |
S-6 | 20.00 | 0.00 | 1.22 | 0.50 | 0.50 | 0.00 | 5 | 5 | 3 | 3 | 3 | 1 |
S-7 | 20.50 | 0.00 | 1.25 | 0.51 | 0.50 | 0.25 | 7 | 5 | 5 | 3 | 3 | 0 |
S-8 | 20.80 | 0.00 | 1.27 | 0.52 | 0.50 | 0.42 | 5 | 3 | 5 | 3 | 3 | 0 |
S-9 | 19.50 | 0.19 | 1.19 | 0.49 | 0.50 | 0.00 | 3 | 3 | 3 | 5 | 1 | 1 |
S-10 | 20.40 | 0.20 | 1.24 | 0.51 | 0.00 | 0.00 | 3 | 3 | 3 | 5 | 3 | 1 |
S-11 | 20.00 | 0.00 | 1.22 | 0.50 | 0.30 | 0.00 | 3 | 1 | 3 | 3 | 3 | 1 |
Cr/Alt. | Product Price | Discount | Efficiency | Durability | Transportation | Price Evolution | Production Fail | Failures | Reception | Quotation | Contract | Technical Assistance | ∑Si | Ranking |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
S-1 | 0.03 | −0.03 | 0.02 | 0.03 | 0.05 | −0.05 | 0.03 | 0.05 | 0.02 | 0.04 | 0.00 | 0.02 | 0.20 | 4th |
S-2 | −0.05 | 0.04 | −0.05 | −0.04 | 0.03 | −0.02 | 0.03 | 0.01 | 0.02 | 0.04 | 0.00 | 0.02 | 0.03 | 7th |
S-3 | 0.00 | 0.04 | 0.00 | 0.00 | 0.05 | 0.00 | 0.03 | 0.01 | 0.02 | 0.04 | 0.00 | 0.02 | 0.21 | 2nd |
S-4 | −0.03 | 0.07 | −0.03 | −0.04 | 0.05 | 0.04 | −0.05 | −0.03 | 0.02 | 0.04 | −0.03 | −0.04 | −0.04 | 8th |
S-5 | 0.01 | −0.03 | 0.00 | 0.00 | −0.02 | 0.00 | −0.01 | −0.03 | 0.02 | −0.04 | 0.00 | 0.02 | −0.07 | 9th |
S-6 | 0.03 | −0.03 | 0.02 | 0.03 | −0.04 | 0.04 | −0.01 | −0.03 | 0.02 | 0.00 | 0.00 | 0.02 | 0.05 | 6th |
S-7 | 0.00 | −0.03 | 0.00 | 0.00 | −0.04 | −0.02 | −0.05 | −0.03 | −0.06 | 0.00 | 0.00 | −0.04 | −0.26 | 10th |
S-8 | −0.02 | −0.03 | −0.02 | −0.02 | −0.04 | −0.05 | −0.01 | 0.01 | −0.06 | 0.00 | 0.00 | −0.04 | −0.27 | 11th |
S-9 | 0.05 | 0.03 | 0.05 | 0.05 | −0.04 | 0.04 | 0.03 | 0.01 | 0.02 | −0.04 | 0.04 | 0.02 | 0.26 | 1st |
S-10 | 0.00 | 0.04 | 0.00 | 0.00 | 0.05 | 0.04 | 0.03 | 0.01 | 0.02 | −0.04 | 0.00 | 0.02 | 0.18 | 5th |
S-11 | 0.03 | −0.03 | 0.02 | 0.03 | 0.00 | 0.04 | 0.03 | 0.05 | 0.02 | 0.00 | 0.00 | 0.02 | 0.20 | 3rd |
Alternatives | Ranking Fertilizer | Ranking Soybean Seed | Ranking Fungicide | ||||||
---|---|---|---|---|---|---|---|---|---|
TCO & MCDM | TCO + MCDM | Avg | TCO & MCDM | TCO + MCDM | Avg | TCO & MCDM | TCO + MCDM | Avg | |
S-1 | 1st | 4th | 2nd | 1st | 1st | 1st | 1st | 1st | 1st |
S-2 | 6th | 7th | 6th | 5th | 3rd | 4th | 5th | 6th | 6th |
S-3 | 5th | 2nd | 4th | 2nd | 2nd | 2nd | 2nd | 2nd | 2nd |
S-4 | 8th | 8th | 8th | 10th | 9th | 9th | 10th | 10th | 10th |
S-5 | 9th | 9th | 9th | 7th | 6th | 6th | 8th | 7th | 8th |
S-6 | 7th | 6th | 7th | 6th | 8th | 7th | 3th | 5th | 4th |
S-7 | 11th | 10th | 11th | 11th | 11th | 11th | 11th | 11th | 11th |
S-8 | 10th | 11th | 10th | 9th | 10th | 10th | 7th | 8th | 7th |
S-9 | 2nd | 1st | 1st | 8th | 7th | 8th | 9th | 9th | 9th |
S-10 | 4th | 5th | 5th | 3rd | 4th | 3rd | 6th | 3rd | 5th |
S-11 | 3rd | 3rd | 3rd | 4th | 5th | 5th | 4rd | 4th | 3rd |
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Lizot, M.; Trojan, F.; Afonso, P. Combining Total Cost of Ownership and Multi-Criteria Decision Analysis to Improve Cost Management in Family Farming. Agriculture 2021, 11, 139. https://doi.org/10.3390/agriculture11020139
Lizot M, Trojan F, Afonso P. Combining Total Cost of Ownership and Multi-Criteria Decision Analysis to Improve Cost Management in Family Farming. Agriculture. 2021; 11(2):139. https://doi.org/10.3390/agriculture11020139
Chicago/Turabian StyleLizot, Mauro, Flavio Trojan, and Paulo Afonso. 2021. "Combining Total Cost of Ownership and Multi-Criteria Decision Analysis to Improve Cost Management in Family Farming" Agriculture 11, no. 2: 139. https://doi.org/10.3390/agriculture11020139
APA StyleLizot, M., Trojan, F., & Afonso, P. (2021). Combining Total Cost of Ownership and Multi-Criteria Decision Analysis to Improve Cost Management in Family Farming. Agriculture, 11(2), 139. https://doi.org/10.3390/agriculture11020139