Supplier selection is a critical process that directly affects overall firms’ performance. There are various factors that come into play when firms are establishing supplier selection criteria. One of the key factors that directly influence firms’ decision towards establishing supplier selection criteria is their relationships with current and previous suppliers. In this study, we qualitatively explore the impact of few decision biases that generates from firms’ relationship with existing or previous suppliers on firms’ supplier selection criteria for new suppliers. Focus group interviews were used as a tool to collect qualitative data. The data was analyzed, and results revealed that the selection criteria for new supplier is affected by reference point bias in decision making based on failed relationship between firm and a supplier. 

Keywords: Decision making; Supplier selection; Firms’ relationships; Selection criteria