Suppose Supplier B improves its conformance quality so that the chemicals it produces are now

99.7

%

pure. The following chart shows the new competitive situation.

LOADING...

Click the icon to view the chart.

Part 2

a. Will this be enough to make Supplier B competitive? Which supplier do you think will win the business?

A.

Increasing the conformance quality to above the qualifier level will allow Supplier A to compete for the business. Since Supplier A is better than Supplier B in 2 of the 3 categories, Supplier A will likely win the business.

B.

Increasing the conformance quality to above the qualifier level will allow Supplier B to compete for the business. It does not depend on how the various customers value the different order winners.

C.

Increasing the conformance quality to above the qualifier level will allow Supplier B to compete for the business. Since Supplier B is better than Supplier A in 2 of the 3 categories, Supplier B will likely win the business if it is able to meet the qualifier.However, it still ultimately depends on how the various customers value the different order winners.

D.

None of the above.

Part 3

b. Managers at Supplier A have determined that if they increase the minimum order size to

110

liters, they can decrease their costs to

$32

per liter. Should they do it?

A.

Supplier A

should

decrease their cost to

$32

per liter by increasing the minimum order quantity to

110

liters. Doing this will result in Supplier A being the leader in

2

of the 3 order winner categories and will likely

win

the business.

B.

There are no reasons to do it. Supplier A will definitely win the business.

C.

Supplier A

should not

decrease their cost to

$32

per liter by increasing the minimum order quantity to

110

liters. Doing this will result in Supplier A being the leader in

0

of the 3 order winner categories and will likely

lose

the business.

D.

There are no reasons to do it. Supplier A will definitely lose the business.