1. Each supplier is rated on a 10-point scale (10 = highest)
for four different criteria: price, quality, delivery, and flexibility (to accommodate changes in quantity and timing). Because of the volatility of the business in which
Beagle operates, flexibility is given twice the weight of each of the other three criteria, which are equally weighted. The table below shows the scores for three potential suppliers for the four performance criteria. Based on the highest weighted score, which supplier should be selected?
|
Criteria
|
Supplier A
|
Supplier B Supplier C
|
|
Price
|
8
|
6 6
|
|
Quality _
|
9
|
7 7
|
|
|
|
|
|
Delivery
1.
|
7
|
9 6
|
|
Flexibility
|
5
|
8 9
|
The Bennet Company purchases one of its essential raw materials from three suppliers. Bennet's current policy is to distribute purchases equally among the three. The owner's son, Benjamin Bennet, just graduated from a business college. He proposes that these suppliers be rated (high numbers mean a good performance) on six performance criteria weighted as shown in the table. A
total score hurdle of 0.60 is proposed to screen suppliers. Purchasing policy would be revised to order raw materials from suppliers with performance scores greater than the total score hurdle, in proportion to their performance rating scores.
|
|
|
Rating
|
Supplier
|
|
Supplier
|
Supplier
|
|
Performance Criterion
|
Weight
|
A
|
|
|
|
1. Price
|
0.2
|
0.6
|
0.5
|
0.9
|
|
2. Quality
|
0.2
|
0.6
|
0.4
|
0.8
|
|
3. Delivery
|
0.3
|
0.6
|
0.3
|
0.8
|
|
4. Production facilities
|
0.1
|
0.5
|
0.9
|
0.6
|
|
5. Environmental protection
|
0.1
|
0.7
|
0,8
|
0.6
|
|
6. Financial position
|
0.1
|
0.9
|
1 0.9
|
0.7
|
a. Use a preference matrix to calculate the total weighted score for each supplier.
b. Which supplier(s) survived the total score hurdle? Under the younger Bennet's proposed policy, what proportion of orders would each supplier receive?
c. What advantages does the proposed policy have over the current policy?
2. Eight Flags operates several amusement parks in the Midwest. The company stocks machine oil to service the machinery for the many rides at the parks. Eight Flags needs 30,000 gallons of oil annually; the parks operate 50 weeks a year. Management is unsatisfied with the current supplier of oil and has obtained two bids from other suppliers.
Which supplier and which shipping quantity will provide the lowest costs for Eight Flags?
3. Horizon Cellular manufactures cell phones for exclusive use in its communication network. Management must select a circuit board supplier for a new phone soon to be introduced to the market. The annual requirements are 50,000 units and Horizon's plant operates 250 days per year.
Which supplier and shipping quantity will provide the lowest total cost for Horizon Cellular?