Two different retail companies, S-Mart and Galatea, are investigating potential outsource partners to manufacture clothing. S-Mart operates a large chain of discount retail stores. It competes based on low prices, convenience, and a wide selection of consumer goods. Galatea is boutique clothing store owned and operated by a major fashion designer. It competes based on fashion design, high-quality materials and construction, and personal customer relationships.

REQUIRED

A. From the viewpoint of each company, rank the following list of outsource partner characteristics from 1 (highest priority) to 9 (lowest priority).

B. Explain how you decided which factors were most important for each company. Also identify the assumptions you made.

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S-Mart Galatea Reasonable worker conditions and labor standards Low worker turnover Precise quality standards Short transportation time (nearby physical location) Lowest price On-time delivery Ability to satisfy rush orders Compliance with intellectual property rights Sufficient capacity for the customer's entire clothing manufacturing needs