Vendor Analysis

Case study Exercise SUPPLIER A SUPPLIER B category weight sub-weight score weighted score
score
weighted score
QUALITY
0.2

ppm defects

0.07
4
4*0.07= 0.28
5
0.35
SPC

0.08
4
0.32
5
0.4
TQM system

0.05
4
0.2
5
0.25
COST STRUCTURE
0.15

0
Cost reductions

0.1
5
0.5
3
0.3
cost relative to industry

0.05
4
0.2
3
0.15
MANAGEMENT CAPABILITY
0.1

0
labour relations

0.05
3
0.15
4
0.2
confidence in management

0.05
4
0.2
3
0.15
FINANCIAL VIABILITY
0.1

0
liquidity ratio

0.05
3
0.15
4
0.2
inventory turnover rate

0.05
4
0.2
3
0.15
debt to equity ratio

0.05
4
0.2
3
0.15
DELIVERY
0.15

0
on time

0.1
5
0.5
4
0.4
lead time

0.05
4
0.2
5
0.25

0.05
5
0.25
3
0.15
TECHNOLOGICAL CAPABILITY
0.2

0
innovative products

0.05
4
0.2
3
0.15
research and development (R&amp.D)

0.05
4
0.2
3
0.15
GENERAL
0.1

0
Problem Solving Ability

0.05
3
0.15
5
0.25
Corrective response

0.05
4
0.2
4
0.2
TOTAL
1

4.1

3.85
From the above table, the recommended supplier is supplier A with a score of 4.1 which is more that supplier B’s, 3.85
Exercise 2

SUPPLIER A
SUPPLIER B
category
weight
sub-weight
score
weighted score
score
weighted score

0.2

ppm defects

0.15
5
0.75
4
0.6
TQM system

0.05
4
0.2
4
0.2

0.2

Cost reductions

0.1
3
0.3
4
0.4
cost relative to industry

0.1
4
0.4
5
0.5

0.1

liquidity ratio

0.05
5
0.25
4
0.2
debt to equity ratio

0.05
4
0.2
3
0.15

0.3

on time

0.2
5
1
4
0.8
lead time

0.1
4
0.4
5
0.5

0.2

labour relations

0.1
3
0.3
4
0.4
confidence in management

0.1
4
0.4
3
0.3
TOTAL
1

3.5

3.35
The supplier I recommend is supplier A with weighted score of 3.5
Exercise 3
Supplier performance criteria
Scale
Definition
5
All shipments received in excellent conditions
4
Up to and including 5% of shipments received have damaged pallets or cartons
3
&gt.5% to 10% of shipments have damaged pallets or cartons
2
&gt.10% to 20% of shipments have damaged pallets or cartons
1
&gt.20% of shipments have damaged pallets or cartons
Quality Performance Criteria
Scale
Definition
5
All shipments have &lt. or =1,000 ppm defects
4
shipments have &gt. or = 1,000 ppm defects
3
shipments have &gt. or =10,000 ppm defects
2
shipments have &gt. or =15,000 ppm defects
1
shipments have &gt. or =20,000 ppm defects
Drop box Assignment #3 Vendor Analysis

Tonga Inc
Mestro Inc
Premier Arts
category
weight
score
weighted score
score
weighted score

Delivery
0.4
3
1.2
4
1.6
4
1.6

Order cycle time
0.3
2
0.6
1
0.3
4
1.2

Price
0.2
5
1
4
0.8
3
0.6

Quality
0.1
2
0.2
3
0.3
4
0.4
TOTAL

3

3

3.8
From this, I recommend Premier Arts as the best supplier because of the highest weighted score.
Rating used
Delivery performance of suppliers
Scale
Definition
5
100% on time
4
&gt.95% but 90% but 85% but less than 90% on time
1
1 week but less than 2 weeks cycle time
2
&gt.2weeks but less than 3 weeks
1
&gt.and equal to 3 weeks
Supplier performance on price
Scale
Definition
5
Price equal to or more than $130
4
Price &gt. but equal to $140
3
Price &gt. but equal $150
2
Price &gt. but equal to $160
1
Price &gt. $170
Quality performance of suppliers
Scale
Definition
5
All shipments have &lt. 1,000 ppm defects
4
shipments have &gt. or = 1,000 ppm defects
3
shipments have &gt. or =10,000 ppm defects
2
shipments have &gt. or =15,000 ppm defects
1
shipments have &gt. or =20,000 ppm defects
Question 6
Two other ways of classifying supplier’s performance include: evaluating capability and evaluating past performance. Evaluating capability involves looking at the staffing structure of the supplier to ensure that they have high chance of being competent in their delivery. Evaluating past performance involves accessing previous experiences in the industry to determine whether history favors them in terms of their performance (Gordon, 2008).
Question 7
Multi-sourcing a critical item comes in handy in a case of demand surges, which calls for use of multiple sources, which promote flexibility from variety of suppliers.
References
Gordon, S. (2008). Supplier evaluation and performance management excellence. Boca Raton, Fla: J. Ross.

You Might Also Like