Individual Homework Exercise Number $1$

Tenet$$s Supplier Selection Exercise $[40\%$ of Total Homework Exercise Grade$]$

Tenet, Inc. is a major Tier $1$ supplier of electrical and electronic parts, with operations in more

than $80$ countries around the globe. It supplies parts to Original Equipment Manufacturers $($OEMs$)$

in a wide range of industries, including; automotive, aerospace, healthcare, and electronics

manufacturing. Ms$.$ Lara Esposito is the global VP of procurement for Tenet, Inc. while Mr$.$ Ron

Thomas serves as the head of purchasing for micro$-$electronic components.

The company has experienced tremendous growth lately due to its diversification into new

business areas. Consequently, this has led to increase in contracts received from many clients. Mr$.$

Thomas is in the process of identifying suppliers for a critical component that goes into the

products that the company makes. Mr$.$ Thomas$$s buyer team has shortlisted $5$ potential suppliers

and requested that they provide a self$-$assessment of their performance in different areas. Based on

this information and others that include the facilities$$ site visits, the $5$ suppliers were given scores

as shown in the table below. Also, the team of evaluators went through a series of iterative

processes to arrive at weights for each criterion. These values are also provided in the table $($shown

in parentheses as percentages$).$ The team$$s intent is to use this information to narrow down to $2$

suppliers so that they can engage in negotiations with them. Depending on the post$-$negotiation

result, the team will decide to either use $1$ of the suppliers or split the production volume between

these $2$ suppliers.

$(1)$ Financial Viability $(20\%)9570609085$

$(2)$ Management $(12\%)$

Experience $(7\%)$

Expertise $(5\%)$

Factors $($Weights$)$ Takayama, Inc. Levi, Inc. Sarasoga, Inc. Kavito, Inc. Weismann, Inc.

$(1)$ Financial Viability $(20\%)9570609085$

$(2)$ Management $(12\%)$

Experience $(7\%)$

Expertise $(5\%)$

$78$

$90$

$30$

$95$

$85$

$90$

$98$

$95$

$95$

$90$

$(3)$ Delivery $(10\%)$

Lead Time $(7\%)$

On$-$Time Performance $(3\%)$

$95$

$90$

$75$

$80$

$35$

$75$

$90$

$96$

$92$

$75$

$(4)$ Quality $(38\%)$

Defect rate $(35\%)$

Use of Best Practices $(3\%)$

$92$

$95$

$90$

$85$

$65$

$85$

$92$

$90$

$95$

$75$

$(5)$ Technical $(15\%)$

Design $(10\%)$

Experience $(5\%)$

$(6)$ Price $(5\%)98$

$88$

$9095$

$95$

$6060$

$90$

$8085$

$94$

$8595$

$90$

$90$

$18($a$)$ Help Mr$.$ Thomas$$s team to determine the $2$ suppliers to which it should narrow down this

list $[$Apply the Weighted Factor Analysis $($WFA$)$ method. Use Microsoft Excel for your

calculations$].[40$ points$]$

$($b$)$ Do you think that the team should eventually recommend using $1$ supplier or split the

volume between these $2$ suppliers? Fully and clearly discuss why you are in favor of one

approach over the other approach $($Discuss at least $3$ reasons$).$ If you are in favor of splitting

the volume between these two suppliers, in what ratio would you split the volume and why?

$[16$ points$]$

$($c$)$ What other factors do you think that the team omitted? Briefly explain your reasoning.

$[$Identify at least $2$ such factors $--$ Your chosen factors must be distinctly different from the

ones already identified in the table above$].[8$ points$]$

$($d$)$ Ms$.$ Sandra Lee is a member of Mr$.$ Thomas$$s team. Having just returned from a buyer$$s

conference, she strongly feels that, given the nature of the specific part under consideration

as well as Tenet$$s current successful financial position, $$Financial Viability$$ should not be

used at all as a factor for selecting suppliers. She believes that the company can extend

temporary credit to a supplier in financial distress. Therefore, she suggests that the current

weight for $$Financial Viability$$ should be added to the current weight for $$Price$$ to obtain

a new weight for $$Price$.$

$[1]$ Do you agree with Ms$.$ Lee on her position here? Explain why or why not. $[6$ points$]$

$[2]$ Would Ms$.$ Lee$$s suggestion alter the choice of suppliers determined previously?

$[$Provide an answer based on the relevant calculations in Microsoft Excel $--$ show your

work$][30$ points$]$

$[$Note: Microsoft Excel is needed for this exercise. Please do not submit the actual

Microsoft Excel solution file through the repository in Moodle. Instead, submit one

integrated pdf file of your solutions as well as answers to all parts, including the Microsoft

Excel procedure. If the instructor needs the actual Microsoft Excel file, he will ask you to

submit it to him by regular email. Needless to say, your score on this assignment depends

on how correct and how well you have answered the questions$]$