You are tasked with selecting the supplier for a new part from four possible venders A, B,
Question:
You are tasked with selecting the supplier for a new part from four possible venders A, B, C, and D. You have data related to price, quality, delivery performance, and a sustainability score (5 is best for sustainability). Assuming each of these four aspects are equally weighted by your purchasing organization, which supplier would you choose given the following information? The critical part dimension for the quality data has a specification of 2.5±0.05 cm; and daily demand of 25, with a daily standard deviation of 30 units; 365 days a year; assume the fixed ordering cost is $150/order and the inventory carrying cost is 40% annually. For this part your organization prefers a service level of at least 95%. Please be clear as to how you are using each piece of information, part of this grade is how you develop and use the data to find the price, quality, delivery performance, and a sustainability score that you use in your analysis. You draw on all of the course to complete this exam question. This is half of the final exam grade, so you want to show off what you know/or have learned.
| Vender | A | B | C | D |
| Price/unit | $15.10 | $15.35 | $15.75 | $14.65 |
| , in cm | 2.502 | 2.497 | 2.499 | 2.503 |
| σ, in cm | .0125 | .0135 | .0110 | .0130 |
| Leadtime (days) | 17 | 15 | 12 | 16 |
| Leadtime Std. Dev. (days) | 8 | 6 | 5 | 7 |
| Sustainability Index (5 is best, 0 is worst) | 4 | 5 | 4.5 | 3 |
#2) Assume your organization focuses primarily on price, assume you are forced to use vendor D (even if D did not win your bid in #1). Using the data in the previous problem, how much should be ordered, and when should be orders be placed if the fixed ordering cost is $150/order and the inventory carrying cost is 40% and what is the total cost of this policy? Suppose vender D offers a 5% discount off the price, provided the order volume is at least 4000 units, does this change your answer regarding how much to order, and, if so, what is the new total cost?
Expert Answer:
To select the best supplier among A B C and D we need to calculate a score for each vendor based on price quality delivery performance and sustainability with equal weight for each aspect Then well ch... View the full answer
