COLLEGE OF BUSINESS EDUCATION

(CBE)

RESEARCH PROPOSAL ON
SUPPLIER SELECTION PROCESS.

A CASE STUDY OF TANESCO, NJOMBE DISTRICT HEAD OFFICE.

PREPARED BY NGAWIPA A SHAIBU (ADAIIIA)

SUPERVISED BY: Mr R. NINDIE

A RESEARCH PROPOSAL SUBMITED IN PARTIAL FULLFILMENT FOR

THE AWARD OF ADVANCED DIPLOMA IN ACCONTANCY OF COLLEGE
OF BUSINESS EDUCATION (CBE)
2009/2010
 ABSTRACT:
Supplier selection represents one of the most important functions to be performed by
the procurement department that determines the long term viability of a company/firm.
Supplier selection is a mult-criteria problem which includes both qualitative and
quantitative criteria.Inorder to select the best suppliers it is necessary to make a tradeoff
between tangible and intangible criteria where some of which may conflict. This
research paper is aimed to investigate the supplier selection processes used by the
companies in Tanzania. The study specifically deals with supplier selection problem in
the organization/company.
Qualitative and quantitative data will be needed for the study as various data collection
methods will be used to collect data from TANESCO, Njombe District. The study will
employ questionnaires and conduct interviews to collect data from potential
people/target group viz. employees, management, customers and company’s suppliers
based in TANESCO, Njombe town in Iringa region. Linear equation model and or
Spearman’s coefficient of correlation will be used to assess the research data and test
the research hypotheses.

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 TABLE OF CONTENTS:

ABSTRACT:............................................................................................ii
ABBREVIATIONS...................................................................................iv
CHAPTER ONE:......................................................................................v
BACKGROUND TO THE STUDY:.............................................................v
1.1. INTRODUCTION..............................................................................................................................V
TANZANIA ELECTRIC SUPPLY COMPANY LIMITED (TANESCO) IS A PARASTATAL ORGANIZATION THAT WAS
ESTABLISHED IN 1964 AND IS WHOLLY OWNED BY THE GOVERNMENT OF TANZANIA. THE MINISTRY OF ENERGY AND
MINERALS REGULATES THE OPERATIONS OF TANESCO.
THE COMPANY'S CORE BUSINESS IS GENERATION, TRANSMISSION, DISTRIBUTION AND SALE OF ELECTRICITY TO THE
TANZANIA MAINLAND AND BULK POWER SUPPLY TO THE ISLAND OF ZANZIBAR. .....................................................V
1.2. BACKGROUND TO THE PROBLEM............................................................................................VI
1.2. STATEMENT OF THE PROBLEM................................................................................................VI
1.3. RESEARCH QUESTION................................................................................................................VII
1.4. RESEARCH HYPOTHESES...........................................................................................................VII
1.5. RESEARCH OBJECTIVES.............................................................................................................VII
1.6. SIGNFICANCE OF THE STUDY.................................................................................................VIII
1.7. SCOPE OF THE STUDY...............................................................................................................VIII
1.8. LIMITATIONS OF THE STUDY..................................................................................................VIII
CHAPTER TWO:....................................................................................ix
LITERATURE REVIEW............................................................................ix
2.0. INTRODUCTION.............................................................................................................................IX
2.1. THEORETICAL LITERATURE REVIEW.....................................................................................IX
2.1.1. Definition of Supplier:..............................................................................................................ix
2.1.2. The supplier selection................................................................................................................x
2.1.3. Types of Suppliers...................................................................................................................xiii
2.1.4. Supplier Selection Methods.....................................................................................................xiv
2.2. EMPERICAL LITERATURE REVIEW:.......................................................................................XVI
2.3. WEAKNESS OF THE REVIEW..................................................................................................XVIII
CHAPTER THREE................................................................................xix
RESEARCH DESIGN AND METHODOLOGY..........................................xix
3.0. RESEARCH DESIGN;..............................................................................................................................XIX
3.1. NATURE AND SOURCE OF DATA .............................................................................................................XIX
3.2. POPULATION.......................................................................................................................................XX
3.3. SAMPLE SIZE........................................................................................................................................XX
3.4. SAMPLING TECHNIQUES.........................................................................................................................XXI
3.4.1. Stratified random sampling.....................................................................................................xxi
3.4.2. Random sampling....................................................................................................................xxi
3.4.3. Purposive sampling.................................................................................................................xxi
3.5. TYPES OF DATA TO BE COLLECTED..........................................................................................................XXI
3.6. METHODS OF DATA COLLECTION............................................................................................................XXII
3.7. DATA ANALYSIS AND INTERPRETATION..................................................................................................XXIII
3.8. HYPOTHESIS TESTING.........................................................................................................................XXIV
BIBLIOGRAPHY..................................................................................xxv
APPENDICES.....................................................................................xxvi

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 1.0. SCHEDULE OF ACTIVITIES.....................................................................................................XXVI
1.2. RESEARCH BUDGET.................................................................................................................XXVI
1.3. QUESTIONNAIRE......................................................................................................................XXVII
1.3.1. QUESTIONNAIRE FOR TANESCO MANAGEMENT.
I’m Ngawipa, Shaibu an undergraduate student at the College of
Business Education wishes to undertake a research on supplier
selection process, I’m hereby request you to take few minutes to
answer the questions below............................................................xxvii
1.3.2. QUESTIONNAIRE TO TANESCO EMPLOYEES............................xxx

ABBREVIATIONS.
ADA Advanced Diploma in Accounts
AHP Analytical Hierarchical Process
AO Accounting Officer
HODs Head of Departments
CBE College of Business Education
IFQ Invitation for Quotation
PCA principal component analysis
PE Procuring Entity
PMU Procurement Management Unit
PPA Public Procurement Act
PPRA Public Procurement Regulatory Authority
TANESCO Tanzania Electrical Supplier Company.
TB Tender Board
TIN Tax Identification Number
URT United Republic of Tanzania
VAT Value Added Tax

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 CHAPTER ONE:

BACKGROUND TO THE STUDY:

1.1. INTRODUCTION.

Tanzania Electric Supply Company Limited (TANESCO) is a parastatal organization

that was established in 1964 and is wholly owned by The Government of Tanzania. The
Ministry of Energy and Minerals regulates the operations of TANESCO.
The Company's core business is generation, transmission, distribution and sale of
electricity to the Tanzania Mainland and bulk power supply to the island of Zanzibar.
In recent years the company is hardly trying to develop relationship with few competent
and innovative suppliers and collaborate with them in non core business process in
order to improve organizational performance and build long term competitive
advantages, therefore suppliers should be selected basing on how their actions will
impact all the performance and competitive elements of the company.
Academicians have recently shown interest in optimizing the entire set of processes
both internal and external to the firm which provide value to the end customers.
However such high level of customer orientation is no longer sustainable competitive
advantage (Matins et el 1996).

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1.2. BACKGROUND TO THE PROBLEM.
Companies they do procure number of products (goods and services) in different
operational stages hence necessitating supplier selection decisions to correspond to
competitive priorities associated with the products they procure.
Marketing literature suggests that the decision of both the buyer and the supplier firms
are guided by the product specific product’s competitive market conditions that change
over time (Rink&Dodge 1980).This implies that the buying firm supplier selection
strategy must change over time.
According to Rink&Fox 1999, supplier selection strategy should have a strategic
orientation and must be governed by objectives that are different from traditional
supplier selection objectives. Supplier selection must consider non price aspects such as
quality, delivery, responsiveness and innovativeness in order to meet the changing
needs of the customers.

1.2. STATEMENT OF THE PROBLEM.

Outsourcing represents one of the methods that can be used to obtain high class
performance levels that are needed to meet customer satisfactions/expectations.
According to Bhatt 2000, when management adopts outsourcing philosophy through the
organization, organization begins to make comprehensive changes to the policy towards
suppliers. Therefore it’s important to evaluate suppliers according to the criteria that
reflect the outsourcing decision of the company/organization. A number of researches
have been conducted on supplier selection but little insight has been put on the supplier
selection problem. The aim of this study is to fill this gap and examine the supplier
selection process in Tanzania specifically in TANESCO as the case study.

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 1.3. RESEARCH QUESTION.
By investigating the supplier selection process, data collected will enable the researcher
to provide answers to the following questions;
i. Do the supplier selection processes of the organizations follow a reliable set of
standards, as PPA requires?
ii. What are the criteria do the company focuses during supplier selection?
iii. Do the key performance measures of the supplier selection processes vary
depending on the company environment?
iv. What are the possible recommendations on existing supplier selection strategy to
improve the quality of service?

1.4. RESEARCH HYPOTHESES.

In order to address the above research questions the following hypotheses can be set
out;
i. Higher level of service rendered by supplier is positively related to the level of
standards/criteria used in selection.
ii. Supplier selection processes varies depending on business environments.

1.5. RESEARCH OBJECTIVES.

The following are the objectives of this research;
i. To evaluate supplier selection processes in different business environments.
ii. To identify the supplier selection processes used by the companies and
recognize which criteria the company focuses onto.
iii. To develop an understanding about the company’s supplier selection processes
in relation to PPA/PPRA standards.
iv. To examine the continuous efforts taken by the company to improve supplier
selection process.

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 1.6. SIGNFICANCE OF THE STUDY.
Once the study is accomplished the researcher believes that it will be of much value to
the number of people in the following ways;
i. To understand the supplier selection factors in much broader sense than before.
ii. The research also will build awareness to the management or firms on the
benefits derived from adherence to PPA standards in supplier selection process.
iii. Also the findings of this research will pave way to other researchers to
undertake this study on much broader way than I will do.

1.7. SCOPE OF THE STUDY.

The scope of this study is to investigate the supplier selection process within a company
using both qualitative and quantitative approaches. The focus is limited to company’s
departments, selected customers and staffs constituting the case study. Also, the
concentration area in this research is the selection problem and evaluation of suppliers.
However the study can be discussed intentionally, nationally and at company level.

1.8. LIMITATIONS OF THE STUDY.

While conducting research, the researcher expects the following limitations to be
encountered;
i. Fewer numbers of divisions and the low response rate from target group.
ii. Lack of information from the respondents.
iii. Problem of time limit i.e. the researcher might be constrained by limited time.
Despite these limitations, the study remains to be useful in clarifying supplier selection
process in the company.

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 CHAPTER TWO:

LITERATURE REVIEW.

2.0. INTRODUCTION.
This chapter sets basic framework for the study by giving a general review on some
theoretical literature and empirical literature. In doing the research, the researcher will
strive to link the idea presented in this part to its application in the researched institution
whereby comments will be made through research report.

2.1. THEORETICAL LITERATURE REVIEW.

2.1.1. Definition of Supplier:

According to business dictionary (2009); supplier is an external entity that supplies
relative common, off the shelf, or standard goods or services, as opposed to a contractor
who commonly adds specialized input to deliverables (www.businessdictionary.com).
OR

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“Supplier” means company, corporation, organization, partnership or individual person
supplying goods or services, hiring equipment or providing transport services and who
is, according to the contract, potential part or the part to the procurement contract with
the procuring entity (PPA, 2004).

2.1.2. The supplier selection.

According to Albert Lester&Anthony Benning (1989); supplier-selection is the process
by which suppliers are reviewed, evaluated, and chosen to become part of the
company’s supply chain.Historically, an antagonistic relationship has often existed
between buyers and suppliers; however, in the past few years a positive change has
been observed in this relationship. Trends, such as shortened product life cycles,
increased rates of technological change, and foreign sourcing, have given rise to
improved communication and cooperation between buyers and suppliers, with
implications on management practices, such as single source procurement. Supplier
selection is generally a lengthy evaluation process. Suppliers are evaluated on several
criteria such as pricing structure, delivery (timeliness and costs), product quality, and
service (i.e. personnel, facilities, research and development, capability, etc.).Frequently,
these evaluation criteria involve trade-offs. For example, one supplier may offer
inexpensive parts of slightly below average quality, while another supplier may offer
higher quality parts, with uncertain delivery, thus setting up trade-offs. In addition, the
importance of each criterion varies from one purchase to the next and is complicated
further by the fact that some criteria are quantitative (price, quality, etc.), while others
are qualitative (service, flexibility, etc.). Thus, a technique is needed that can adjust for
the decision maker’s attitude toward the importance of each criterion and incorporates
both qualitative and quantitative factors.

According to PPA (2004); a procuring entity engaging in the procurement of goods,

works or services or disposal by tender shall apply competitive tendering, using the

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methods prescribed in the Regulations depending on the type and value of the
procurement and, in any case, the successful tender shall be the tender offering the
lowest evaluated cost. If suppliers have already been pre-qualified or there is an urgent
need for the goods, or services such that it would be impracticable to engage in open
national or international tendering on competitive selection the PE may either restrict
the issue of tenders in accordance with the procedures set out in the Regulations.
Supplier selection process takes the following pattern;
Issuing adequate notifications: all eligible prospective suppliers must be notified with
the PE on the procurement needs with equal opportunity to tender for the required
goods or service.
Invitation to tender and advertising: PE prepares a tender notice inviting suppliers to
submit priced offers for the supply of the goods or services required and tender notice
is
submitted to the Secretary of the tender. Then the approved tender notice is advertised
by the PE as set out in the Act
Issue of tender documents: the PE shall issue tender documents immediately after first
publication of the tender notice to all suppliers who responded to the tender notice and
pay the requisite fee, if required, for which a receipt shall be given. All prospective
tenderers are given with the same information, and be assured of equal opportunities to
obtain additional information,
Receipt of tenders and tender opening: TB receive tenders documents using
procedures as set out in the Act. The Secretary to the tender board give each bidder a
receipt showing the time and the date that the tenders were received, and any tender
received after the deadline shall be returned unopened to the tenderer.All submitted
tenders are opened in public, in the presence of the tenderers or their representatives and
other parties with a legitimate interest in the tender proceedings and the tender opening
immediately after the deadline time and date given in the tender documents for the
receipt of the tenders and the names of all those present at the tender opening and the
organizations they represent are recorded by the Secretary of the respective TB.

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Evaluation and comparison of tenders: The PE evaluates the received tenders on
common basis/criteria as set out in the tender documents such as costs, price, technical
ability, delivery, and commercial aspects. Any relevant criteria in addition to the
mentioned above which are important for evaluation of tender are stated in the tender
document. The PE prepares a detailed report on the evaluation and comparison of
tenders, setting out the specific reasons on which its recommendations for the award of
each contract are based.
Approval and award of contract: The TB review the evaluation and recommendation
made by the PE and may either approve the recommendation and authorize the
procuring entity to accept the tender and award a contract in the form specified in the
tender documents or refuse to authorize acceptance of any of the tenders and refer the
evaluation back to the procuring entity with an instruction to re-evaluate the tenders or a
recommendation for re-tendering or other action.
If competitive quotation(restricted tendering) method is used: The PE makes a
short list of potential suppliers and therefore given quotations which are submitted
sealed to the secretary of TB for opening and all other procedure stated above follow.
After Quotation opening and subject to Regulation 90 (1) of G.N. No. 97 of 2005, the
AO appoint an Evaluation Committee to carry out evaluation of Quotations where they
carry out prequalification and pot qualification to the given quotations. The purpose of
the prequalification is to determine whether quotations are complete, no computational
errors have been made, the quotations have been properly filled, signed and stamped
with firm’s rubber. The bidders who met the requirement of the Invitation for
Quotation (IFQ) are considered substantially responsive to preliminary examination of
Quotations and therefore considered for further detailed Evaluation. Those considered
non-responsive are not considered for further evaluation. Criteria used to check the
compliance of Quotations during preliminary evaluation are VAT, TIN, certificate of
registration, business license and certificate of incorporation. After preliminary
evaluation then detailed evaluation follows by using standard set criteria whereby
bidders are evaluated so as to get the lowest evaluated bidder who is considered

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potential to supply goods or services to the organization. The criteria used for post
qualification are like price, time of delivery, technical and commercial aspect.

2.1.3. Types of Suppliers

Suppliers can be divided into four general categories: manufacturers, distributors,

independent craftspeople and importation sources

The first category is the manufacturers in which most retailers buy through company
salespeople or independent representatives who handle the wares of several different
companies.

The second type of suppliers are the distributors who also are known as wholesalers,
brokers or jobbers, distributors buy in quantity from several manufacturers and
warehouse the goods for sale to retailers. Although their prices are higher than a
manufacturer’s, they can supply retailers with small orders from a variety of
manufacturers. A lower freight bill and quick delivery time from a nearby distributor
often compensates for the higher per-item cost.

The third type is the independent craftspeople that are exclusive distributors of unique
creations frequently offered by these independent craftspeople, who sell through
representatives or at trade shows.

The fourth type of suppliers is the importation sources in which many retailers buy
foreign goods from a domestic importer, who operates much like a domestic wholesaler.
Or, depending on the company’s familiarity with overseas sources, it may want to travel
abroad to buy goods (www.entrepreneur.com).

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 2.1.4. Supplier Selection Methods
There are several supplier selection methods available in the literature. These methods
are explained here under;
Total cost approaches, this method attempt to quantify all costs related to the selection
of a vendor in monetary units, this approach includes cost ratio and total cost of
ownership.
The cost-ratio is a method that relates all identifiable purchasing costs to the monetary
value of the goods received from vendors. The higher the ratio of costs to value, the
lower the rating applied to the vendor. The choices of costs to be incorporated in the
evaluation depend on the products involved. The costs associated with quality include
the costs of visits to a vendor’s plants and sample approval, inspection costs of
incoming shipments, and the costs associated with defective products such as unusual
inspection procedures, rejected parts and manufacturing losses due to defective goods.
Quality costs can be determined and documented by the quality control department,
with the help of other departments such as production and receiving. The usual costs
associated with delivery include communications, settlements and emergency transport
costs (for example air shipments). The cost-ratio method establishes a “norm” of
supplier services and evaluates vendors above and below the norm in relation to price.
The subjective elements common to other methods are thus reduced. The cost ratio
method is based on cost analysis that considers cost ratios for product quality, delivery,
customer service and price. The cost ratio measures the cost of each factor as a
percentage of total purchase for the supplier (Timmerman 1986).
Mathematical programming models often consider only the more quantitative criteria;
this approach includes the principal component analysis and neural network. The
principal component analysis (PCA), it is a multiobjective approach to vendor selection
that attempts to provide a useful decision support system for a purchasing manager
faced with multiple vendors and trade-offs such as price, delivery, reliability, and
product quality(Petroni and Braglia 2000).

xiv
The categorical method; it relies heavily on the experience and ability of the individual
buyer. People in charge of purchasing, quality, production and sales all express their
opinions about the supplier’s performance on the basis criteria which are important to
them. These departments assign either a preferred, unsatisfactory, or neutral rating for
each of the selected attributes for every contending supplier. At periodic evaluation
meetings, the buyer discusses the rating with department members. The buyer then
determines the supplier’s overall scores.
Another method is the weighted point which considers attributes that are weighted by
the buyer. The weight for each attribute is then multiplied by the performance score that
is assigned. Finally, these products are totaled to determine a final rating for each
supplier All measurement factors are weighted for importance in each purchasing
situation, this system is designed to utilize quantitative measurements. The following
example (David Farmer 1986) summarizes the weighted point method:
Example: supplier performance is measured in three criteria quality, delivery and
price. Quality is rated by deducting the number of rejects as a decimal fraction of the
total quantity delivered from the base score of 1.Delivery is rated by deducting 0.05 for
each late delivery from the base score of 1.Price is rated by dividing the supplier’s price
into the lowest price quoted. To combine the three scores into single overall rating,
weights have to be used according to the relative importance attached to them. In this
case price and delivery are weighted equally, each score being multiplied by 25 where
quality is considered twice important soothe weighting is 50. Consider the following
example;
Quality: 50*1.00-0.12=44
Delivery: 25*1.00-0.25=18.75
Price: 25*95/100 =23.75
Overall rating 86.50
Linear weighting models in which suppliers are rated on several criteria and in which
these ratings are combined into a single score. These models include the categorical, the
weighted point and the analytical hierarchical process.

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The last method is the Analytical Hierarchical Process (AHP), a decision-making
method developed by Saaty (1980) for prioritizing alternatives when multiple criteria
must be considered and allows the decision maker to structure complex problems in the
form of a hierarchy, or a set of integrated levels. Generally, the hierarchy has at least
three levels: the goal, the criteria, and the alternatives. For the supplier selection
problem, the goal is to select the best overall supplier. The criteria can be quality, price,
service, delivery, etc. The alternatives are the different proposals supplied by the
suppliers. The AHP offers a methodology to rank alternative courses of action based on
the decision maker’s judgments concerning the importance of the criteria and the extent
to which they are met by each alternative. For this reason, AHP is ideally suited for the
supplier selection problem (Nydick and Hill 1992).

2.2. EMPERICAL LITERATURE REVIEW:

According to Tan, Keah (2002), his study demonstrated the importance of supplier
selection and assessment on the buying firm’s performance where he demonstrated that
the strategic commitment from suppliers is vital determinant of business success also
the study showed that supplier selection has indirect on the business performance e.g.
easy of addressing quality and delivery problems if there is relationship between buyer
and supplier. The study reinforced to view supplier as an extension of a buying firm and
not a distant independent entity. Furthermore Tan found that there is a need to reassess
supplier management tactics where as the fact of developing long term relationships
with suppliers, and critically evaluating soft, difficult to measure performance, takes
time and is costful activity.

Mohammady Garfamy R. (2004), conducted research on supplier selection, he proposed

supplier attributes in collaboration with literature studies and grouped them into five
main categories: (1) quality, (2)service, (3) organization profile, (4) relationship and (5)
cycle time to form a backbone of a generic supplier selection mechanism as shown in

xvi
table 1 below. He also found that some of factors are traditional dimensions used in
previous studies, but others are longer term and more subjective or judgmental in
nature. Each factor is related to outsourcing decisions and contains a specific set of
criteria that are important for supplier evaluation at different phases of the decision
process.

Table 1: Supplier selection factors and criteria.

Factor Criterion
Quality Durability (i.e. Lifespan)
Ergonomic quality
Flexibility of operation
Simplicity of operation
Reliability (e.g., Quality over a given period of time, Consistency)

Service Reaction to demand

Ability to modify product/service
Technical support
After sales services (e.g., Warranties and Claims policies)
Flexibility (Payment, Freight, Price reduction, Order frequency & amount)
Organization Quality performance (e.g., ISO 9000 accreditation)
Current technology (Product and Process)
Geographical location
Production facilities and capacity
Technological capability
Innovativeness
EDI capability
Relationship Compatibility with levels and functions of buyer firm
Customer base
Ability to identify need
Ability to maintain commercial relations
Availability
Cycle Time Development speed
Delivery lead time

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Marlene J. Suárez Bello (2003); conducted research on supplier selection process and
found that, supplier selection processes are very important to organizations nowadays
since choosing the one that fits best the company’s needs, can bring significant savings.
Her findings showed that these processes can vary across companies depending on
many factors. One of these factors is the focus criteria of the company that depends on
its competitive market. These criteria may vary from quality, cost/price, delivery,
financial capability and stability, supplier management capability, overall personnel
capabilities, process and technological capability, environmental regulation compliance,
supplier purchasing strategies, policies and techniques.

2.3. WEAKNESS OF THE REVIEW.

From the above researchers about supplier selection, the following only the gap noticed
is the lack of empirical research examining supplier selection problem in the
organization.
This study aims to fill this gap and empirically examine the problem encountered during
supplier selection in the firm/company.

xviii
 CHAPTER THREE.

RESEARCH DESIGN AND METHODOLOGY.

3.0. Research design;

Kothari C.R (2006:31) defined research design as the arrangement of conditions for
collection and analysis of data in a manner that aims to combine relevance to the
research purpose with economy in procedures. The research design is the conceptual
structure within which research is conducted, it constitutes of the blueprint the
collection, measurement and analysis of data.
The research will use case study design because of the limited funds and also due to its
flexibility in the methods of data collection rather than other types such as survey and
experimental design, whereby the answers to the research questions raised earlier will
be obtained through questionnaires and interviews. The researcher expects that all
necessary data will be obtained since the research is going to be carried out at the head
office TANESCO, Njombe District. Thus, in large extent the study will be descriptive
in nature.

3.1. Nature and source of data

All surveys are concerned with identifying the research population, which will provide
all the information necessary for answering the original research question. In this
process and in the use of a sample, one of the first considerations is to obtain a working
definition of the population to be studied, which constitutes the sampling frame, a
comprehensive list of members (individuals or objects) of the research population from
which a (random) sample is to be drawn. To test the research hypotheses, we need a
context where the processes are outsourced frequently and improved continuously.

xix
For the purpose of study, TANESCO Njombe town is strategically selected as the
limited geographical area for collecting data because the Njombe town is a center of the
District.
The researcher will then identify appropriate respondent in each of these departments to
whom the self completion questionnaire is to be send in advance. The questionnaires are
administered through asking the well-informed respondents such as the managers or
directors of logistics/purchase/material or contracts/commercial divisions of the
company about the outsourced processes or activities. The research study is based on
these essential sources of evidence, which provides the needed data related to each
outsourced product that considered as the unit of analysis.The researcher expect to
obtain data that will be coded tabulated using both qualitative and quantitative
techniques.

3.2. Population.
Population of the study will be of all of the employees of the organization and some
customers. The researcher expects to use proportional stratified random sampling
technique to ensure a balance of at least respondents from each department. In this
method the researcher will divide the population into strata (groups) according to the
number of specific group of population to be included in the sample. Then from each
stratum a sample is randomly drawn either proportionally or disproportional.

3.3. Sample size.

The researcher will interview some customers as well as workers from various
department one of them being Managing Director, HODs, and customer care workers.
The sample size will be of not less than 50 respondents, which will include not less than
customers as well 20 workers.

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3.4. Sampling techniques.
The techniques to be applied for data collection during the study to obtain true sample
will include the following;

3.4.1. Stratified random sampling

This method will be used so as to avoid biasness of taking systematic random sampling
from one stratified sampling frame. This method is both cheaper in terms of money and
time.

3.4.2. Random sampling.

Under this technique, all members in the targeted population will have equal chance of
being selected. The researcher will select a sample according to their appropriateness in
relation to the study.

3.4.3. Purposive sampling

Is a non probability sampling strategy in which a researcher selects participants who are
considered as being typical of the wider population? Thus basing on this technique the
researcher will judge whom to inquire.

3.5. Types of data to be collected.

Qualitative and quantitative of data will be collected from the company’s departments
specifically procurement department, finance customer care department and technical
department where there are technicians who also meet with customer’s constructions
and administration department. Also primary and secondary data will be used.

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 3.6. Methods of data collection
The data collection process for this study is performed through self-administered
questionnaire and interviews. These data collection tools will be used to
collect evidence from management, employees and customers. Because the population
is not large then questionnaire will be send in advance
to all members to be filled.
These are methods that will be applied by the researcher in the process of collecting
data, they can also be called data collection techniques also they involve observation
and documentary review.

a) Interview.
This method involves direct consultation to the concerned employees of the
organization and all interview technique will be used to ensure that the respondents are
free to answer and explain all that they know. Aims at obtaining information which is
necessary for the study. The respondent will provide relevant to the researcher. The
following are reasons which makes researcher to choose interview in study.
i. Flexibility
The researcher can repeat or refine the question when the response indicates that the
respondents misunderstood it and the fact that people who are unable to read and write
can still answer questions in an interview.
ii. Non verbal behaviors
The interviewer is present to observe non verbal behaviors. This will assist researcher
to assess the validity of respondents answers.
iii. Control over environment
An interviewer can standardize the interview environment by ensuring that the
interview is conducted in a private, on-noise place and cost but not least.
iv. No cheating.
The required respondent gives answers and no body answers on behalf, hence no
cheating.

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 b) Observation.
This will also be one of the easiest ways of collecting data. This is because the
researcher will participate fully in the daily activities of the organization. The researcher
will be able to see what will be going on in the organization and record important things
for the research. This method will be very useful because what the researcher will get
from this method will be current and reliable evidence due to full participation. It will
ensure the validity and reliability of the evidence in the area concerned.

C) Questionnaires.
This will also be one of the methods of data collection. The researcher will prepare a set
of questions and distribute to the workers from each department and customers to
answer them. Despite its main advantage of saving time it has also its disadvantage of
low response rate.
d) Documentary review.
The researcher will use all available documents from procurement department as well as
other department so as to review all the necessary and relevant documents to the
research. It will provide related official reports which are very important in writing any
research paper.

3.7. Data analysis and Interpretation.

Relying on theoretical proposition that supplier selection process requires tradeoff
between different criteria, the preferred
analytical strategy will be linear regression model since this model provides expected
results from the data collected concerning supplier selection problem. Since data
generated from the above techniques will be both qualitative and quantitative the y will
be presented in the form of tables and appendices.

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 3.8. Hypothesis Testing.
The responses obtained will be to tested for their relationships depicted in the research
question using tools for testing causal models which are regression and correlation
analysis because they can be used to appraise all parameters directional relationships,
measurement items and error terms simultaneously. It also enables to evaluate the
statistical significance of each measurement item as well as each proposed relationship
between variables.

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 BIBLIOGRAPHY.
Albert Lester&Anthony Benning (1989); Procurement in the Process Industry,
Butterworth &Co Ltd, London.
Bhatt, G. D. 2000, ‘An empirical examination of the effects of information systems
integration on business process improvement’, International Journal of Operations and
Production Management
Dempsey, “Vendor Selection and the Buying Process”, Industrial Marketing
Management, 1978, pp. 257-267.
Dennis Kondo (1998) Business Basics in Hawaii; Hawaii University Press.
John L Burbidge (1971); The Principles of Production Control, 3rd Edition,
McDonald&Evans Ltd 8John street, London WC1N2HY.
Kothari C.R (2006); Research Methodology (2nd Edition); New Age International (P)
Ltd India.
Mohammady Garfamy, R. 2004, Supplier Selection and Business Process Improvement:
An exploratory multiple-case study, Research Work.
Nydick and Hill, “Using the Analytic Hierarchy Process to Structure the Supplier
Selection Procedure”, International Journal of Purchasing and Materials Management,
1992, pp. 31-36.
Pearson, J. N. & Ellram, L. M. 1995, ‘Supplier selection and evaluation in small versus
large electronics firms’, Journal of Small Business Management
URT (2004) PPA, 2004.p247
Paper, D. 1998, ‘BPR: Creating the conditions for successes, Long Range Planning,
Peter Baily&David Farmer (1986); Purchasing Principles and Management, 5th Edition,
Pitman Publishing 128 Long acre, London WC2E9AN.
Petroni and Braglia, “Vendor Selection Using Principal Component Analysis”, The
Journal of Supply Chain Management: A Global Review of Purchasing and Supply,
2000, pp. 63-69.
Timmerman, “An Approach to Vendor Performance Evaluation”, The Journal of
Supply Chain Management, 1986, pp. 2-8.

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 APPENDICES.

1.0. SCHEDULE OF ACTIVITIES.

S/No Task Name Duration in weeks

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
1 Familiarity
with working
environment
2 Preparation of
data collection
methods
3 Data
collection
4 Data analysis
and
Interpretation
5 First draft of
report
6 Final draft

1.2. RESEARCH BUDGET.

The researcher will be required to have sufficient fund for conducting the study. Source
of funds to finance the study will be from sponsor, parents, relatives and friends.
The budget to be used is summarized as bellow:

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S/NO. ITEMS COST TOTAL(TSH)
1. Traveling expenses 1000Tshs x 119days 119,000
2. Meals and5000Tshs x 119days 595,000
accommodation expenses
3. Stationary 100,000 100,000
4. Printing 70,000 70,000
5. Binding 20,000 20,000
6. Miscellaneous expenses 100,000 100,000
TOTAL 1,004,000

1.3. QUESTIONNAIRE.

1.3.1. QUESTIONNAIRE FOR TANESCO MANAGEMENT.

I’m Ngawipa, Shaibu an undergraduate student at the College of Business
Education wishes to undertake a research on supplier selection process, I’m hereby
request you to take few minutes to answer the questions below.
The research is for academic purpose only, hence I assure you that your answers will be
completely kept confidential.
INSTRUCTIONS:

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Just put a tick (√) for the questions with multiple answers and fill the blank spaces with
your own answers.
1. What is your title?
2. For how long have you worked with this company?
Less than a year

One year

Two years

Three years

More than three years

3. Have you ever worked with other firm/ organization which provide the same
service as TANESCO?

Yes
No
4. Please give your level of education
Primary education

Secondary education

Graduate

Other

xxviii
 5. Does the company have suppliers?
Yes

No

6. What do you think are the causes that make the organization to select supplier?

Improve service to customers

Division of labor

Minimize costs

Lack of working tools in the technical department.

Any other causes

……………………………………………………………………………………………
……………………………………………………………………………………………
……
7. Which criteria do you use in selecting suppliers?
a) In house set criteria
b) PPA and PPRA standards
c) No standard set criteria
8. What are the problems do you encounter in the whole process of selecting
suppliers?
………………………………………………………………………………………
………………………………………………………………………………………

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 ………………………………………………………………………………………
………
9. Are the criteria used conform to those stipulated by PPA?
Yes

No
If NO specify the criteria you use.
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
…………
10. Do the key performance measures of the supplier selection process vary
depending on the company environment?
Yes
No

11. As TANESCO employee, please give your suggestion/ recommendations on

how to improve the services provided by the company.
a. Training
b. Special vendor/supplier
c. Adhere to PPRA standards
d. Updated procurement schedules
e. Budget for emergency procurement
f. No comment

1.3.2. QUESTIONNAIRE TO TANESCO EMPLOYEES.

The questionnaire is just for academic award for the student; the answer given will be
strictly confidential and will be used for academic purposes only.

xxx
Please give the appropriate answers. (Please tick only one bracket according to your
view)

1Which position do you hold in this company?

……………………………………………………………………………………
……………………………………………………………………………………
……
2. For how long have you worked with this company?
Less than a year

One year

Two years

Three years

More than three years

3. Have you ever worked with other firm/ organization which provide the same
service as TANESCO?

Yes
No

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 4. Please give your level of education
Primary education

Secondary education

Graduate

Other
5. How do TANESCO provide its services?
Very good

Good

Average

Poorly
6. What do you think are the causes that hinder efficiency and effectiveness of
TANESCO?
……………………………………………………………………………………………
……………………………………………………………………………………………
……………………………………………………………………………………………
……………………………………………………………………………………………
……………………………………………………………………………………………

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 7. As TANESCO employee, please give your suggestion/ recommendations on
how to improve the services provided by the company.
a. Training
b. Special vendor/supplier
c. Adhere to PPRA standards
d. Updated procurement schedules
e. Budget for emergency procurement
f. No comments
8. What do you think are the benefits of having suppliers in TANESCO?
……………………………………………………………………………………………
……………………………………………………………………………………………
.
……………………………………………………………………………………………
……………………………………………………………………………………………

9. Is there any relationship between suppliers selected to the level (Quality) of

services rendered by the company?
Yes

No

If yes give reasons

……………………………………………………………………………………………
…

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.............................................................................................................................................
.............................................................................................................................................
.....

If no give
reasons…………………………………………………………………………..
……………………………………………………………………………………………
……………………………………………………………………………………………
……

10. Do the key performance measures of the supplier selection process vary
depending on the company environment?
Yes
No

11. Do you think that the current crisis faced by TANESCO is due to poor standards
used by the company to select suppliers?
Yes

NO
If No what are the causes?
……………………………………………………………………………………………
……………………………………………………………………………………………
12. Which criteria do you use in selecting suppliers?
d) In house set criteria
e) PPA and PPRA standards
f) No standard set criteria

xxxiv
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