Vendor Analysis - Case Study Example

Case study Exercise SUPPLIER A SUPPLIER B category weight sub-weight score weighted score score weighted score QUALITY 0.2           ppm defects   0.07 4 4*0.07= 0.28 5 0.35 SPC   0.08 4 0.32 5 0.4 TQM system   0.05 4 0.2 5 0.25 COST STRUCTURE 0.15         0 Cost reductions   0.1 5 0.5 3 0.3 cost relative to industry   0.05 4 0.2 3 0.15 MANAGEMENT CAPABILITY 0.1         0 labour relations   0.05 3 0.15 4 0.2 confidence in management   0.05 4 0.2 3 0.15 FINANCIAL VIABILITY 0.

1         0 liquidity ratio   0.05 3 0.15 4 0.2 inventory turnover rate   0.05 4 0.2 3 0.15 debt to equity ratio   0.05 4 0.2 3 0.15 DELIVERY 0.15         0 on time   0.1 5 0.5 4 0.4 lead time   0.05 4 0.2 5 0.25     0.05 5 0.25 3 0.15 TECHNOLOGICAL CAPABILITY 0.2         0 innovative products   0.05 4 0.2 3 0.15 research and development (R&D)   0.05 4 0.2 3 0.15 GENERAL 0.1         0 Problem Solving Ability   0.05 3 0.15 5 0.25 Corrective response   0.05 4 0.2 4 0.

2 TOTAL 1     4.1   3.85 From the above table, the recommended supplier is supplier A with a score of 4.1 which is more that supplier B’s, 3.85 Exercise 2       SUPPLIER A SUPPLIER B category weight sub-weight score weighted score score weighted score   0.2           ppm defects   0.15 5 0.75 4 0.6 TQM system   0.05 4 0.2 4 0.2   0.2           Cost reductions   0.1 3 0.3 4 0.4 cost relative to industry   0.1 4 0.4 5 0.5   0.1           liquidity ratio   0.05 5 0.25 4 0.2 debt to equity ratio   0.05 4 0.2 3 0.15   0.3           on time   0.2 5 1 4 0.8 lead time   0.1 4 0.4 5 0.5   0.2           labour relations   0.1 3 0.3 4 0.

4 confidence in management   0.1 4 0.4 3 0.3 TOTAL 1     3.5   3.35 The supplier I recommend is supplier A with weighted score of 3.5 Exercise 3 Supplier performance criteria Scale Definition 5 All shipments received in excellent conditions 4 Up to and including 5% of shipments received have damaged pallets or cartons 3 >5% to 10% of shipments have damaged pallets or cartons 2 >10% to 20% of shipments have damaged pallets or cartons 1 >20% of shipments have damaged pallets or cartons Quality Performance Criteria Scale Definition 5 All shipments have < or =1,000 ppm defects 4 shipments have > or = 1,000 ppm defects 3 shipments have > or =10,000 ppm defects 2 shipments have > or =15,000 ppm defects 1 shipments have > or =20,000 ppm defects Drop box Assignment #3 Vendor Analysis     Tonga Inc Mestro Inc Premier Arts category weight score weighted score score weighted score                     Delivery 0.4 3 1.2 4 1.6 4 1.6                 Order cycle time 0.3 2 0.6 1 0.3 4 1.2                 Price 0.2 5 1 4 0.8 3 0.

6                 Quality 0.1 2 0.2 3 0.3 4 0.4 TOTAL     3   3   3.8 From this, I recommend Premier Arts as the best supplier because of the highest weighted score. Rating used Delivery performance of suppliers Scale Definition 5 100% on time 4 >95% but 90% but 85% but less than 90% on time 1 1 week but less than 2 weeks cycle time 2 >2weeks but less than 3 weeks 1 >and equal to 3 weeks Supplier performance on price Scale Definition 5 Price equal to or more than $130 4 Price > but equal to $140 3 Price > but equal $150 2 Price > but equal to $160 1 Price > $170 Quality performance of suppliers Scale Definition 5 All shipments have < 1,000 ppm defects 4 shipments have > or = 1,000 ppm defects 3 shipments have > or =10,000 ppm defects 2 shipments have > or =15,000 ppm defects 1 shipments have > or =20,000 ppm defects Question 6 Two other ways of classifying supplier’s performance include: evaluating capability and evaluating past performance.

Evaluating capability involves looking at the staffing structure of the supplier to ensure that they have high chance of being competent in their delivery. Evaluating past performance involves accessing previous experiences in the industry to determine whether history favors them in terms of their performance (Gordon, 2008). Question 7 Multi-sourcing a critical item comes in handy in a case of demand surges, which calls for use of multiple sources, which promote flexibility from variety of suppliers.

References Gordon, S. (2008). Supplier evaluation and performance management excellence. Boca Raton, Fla: J. Ross.