Abstract: The situation that supplier simultaneously has dual-role and undesirable output factors would arise, during supplier evaluation based on DEA. A new idea is proposed for processing dual-role factor in present paper. Dual-role factor act as input and output role simultaneously in DEA model, and all dual-role factors essentially are intermediate variables of network DEA model; to move forward a single step, production system with dual-role factors certainly can be decomposed into multiple subsystems, and anyone dual-role factor is both an input of a subsystem and a output of another subsystem.To measure the efficiencies of suppliers, based on existed relational two-stage DEA model, production and operation of suppliers are treated as two-stage process, and dual-role factors of suppliers are treated as intermediate variables of two-stage process, by virtue of expressing all output factors as weighted sum, whereas the weight of undesirable factors being negative, a two-stage DEA model for evaluation of supplier with dual-role and undesirable output factors is proposed.A real example with 18 third-party logistics providers verifies reasonability and feasibility of the method. The related attributes for 18 third-party logistics providers are partially taken from related attributes of literature[10] [25]. In this example, the input is total cost of shipments, and undesirable output is parts per million of defective parts, and desirable output is revenue, and dual-role factor is supplier capability. The contribution of the present paper consists in two aspects, one is the processing of dual-role factor, a new idea and method is proposed in the processing, the other is that a two-stage DEA model for evaluation of supplier with dual-role and undesirable output factors is proposed.

Key words: data envelopment analysis, dual-role factors, undesirable factors, supplier evaluation