Supply chain managers use numerous metrics to evaluate performance and identify improvements to the design and operations of their supply chains. Supply chain metrics typically balance customer requirements as well as internal supply chain efficiencies. Perhaps the most important financial measure for supply chain performance is total supply chain cost. Supply chain managers must consider not only the direct cost of procurement but also the costs of transportation, tariffs$/$fees$,$ inventory, and management oversight. Supply chain managers seek to optimize the total system cost using analytic modeling and analysis.

Before beginning this activity, review Section $12\mathrm{.}5$a in the textbook.

Alpha Medical Manufacturing $($AMM$),$ located in Punta Gorda, Florida, produces medical devices for orthopedic surgery including replacement parts for human knees, hips, and elbows, and surgical tools. One product they assemble in their factory is a special aluminumalloy surgical screw used to anchor human tissue to the bone. The screw consists of four component parts, one being the aluminum alloy while the other three parts are made of medical grade plastics. AMM is evaluating three Tier $1$ suppliers to manufacture the aluminum part of the orthopedic screw. Annual demand for this item is $20,000$ units per year, with $250$ days in a year. Management must be very careful in making this decision because obsolescence risks are high in this industry as new orthopedic devices and treatments happen frequently.

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