Under what conditions might a company prefer to negotiate

Assignment Help Operation Management

Reference no: EM13730522

1. Under what conditions might a company prefer to negotiate rather than use competitive bidding to select a supplier?

2. Explain the benefits of using a single supplier as opposed to multiple suppliers. What are the risks?

3. Answer the following questions based upon the case described below:

You have been asked to choose a source for a printed circuit boards used in your company's products. These printed circuit boards have a low value potential as they are used in a limited number of products, however they are very complex to build. There are three suppliers who are capable of producing these printed circuit boards and have submitted bids based upon your recent Request for Proposal. The supplier's bids and key performance parameters are below:

	Supplier A	Suppliers B	Supplier C
Price / Unit	$200	$215	$225
Quality level	99.25%	96.00%	99.95%
Delivery on-lime	99.00%	96.00%	96.00%
Order cycle time	3 weeks	0.5 weeks	1 week

a. Given the information above and referring back to the portfolio analysis model, what type of commodity is this? What type of sourcing strategy should you employ? What actions should you consider?

b. You estimate that it would cost your company $12 million to produce these parts annually. The annual demand for the printed circuit boards is 50,000. Should you consider making these parts or buying it?

c. You've decided to use a weighted point evaluation system to evaluate the suppliers. Using the weights below and a 1-3 scale (3 being the best, 1 the worst), which supplier would you rate the best?

Price /Unit	Quality level	Delivery on-time	Order cycle time
0.25	0.3	0.3	0.15

		Supplier A		Suppliers B		Supplier C
0.25	Price / alit	3		2		1
0.3	Quality level	2		1		3
03	Delivery on-time	3		2		1
0.15	Order aide time	1		3		2
Score			2.4		1.85		1.75

d. Based on the data and your answer above, would you choose a single source or multiple sources? Why? If multiple sourcing, how much business would you give each supplier (be specific)?

Reference no: EM13730522

Questions Cloud

Demonstrate your knowledge of child development : Demonstrate your knowledge of child development by analyzing the relationship between attachment style, as outlined by Mary Ainsworth, and any one of the other topics covered in the discussions or journals in this course.

Describes how the modern era has affected cultural exchange : which of the following describes how the modern era has affected cultural exchange?

Prepare the direct material usage budget : Prepare the direct material usage budget for the first quarter of next year and prepare the direct manufacturing labour usage budget for the first quarter of next year.

Explain the athenian democracy and the roman republic : the Athenian democracy and the Roman Republic. Use specific examples and details from the assigned reading to support your argument regarding these 2 governments.

Under what conditions might a company prefer to negotiate : Under what conditions might a company prefer to negotiate rather than use competitive bidding to select a supplier. Explain the benefits of using a single supplier as opposed to multiple suppliers. What are the risks.

How do secondary markets assist the primary market : Explain how and why the secondary capital markets play an important role in our economy. how do secondary markets assist the primary market?

What is the amount of the firms current assets : Killer Whale, Inc. has the following balance sheet statement items: current liabilities of $629,031; net fixed and other assets of $1,325,570; total assets of $3,263,940; and long term debt of $657,581. What is the amount of the firm's current assets..

Explain campaign of attacks on synagogues ownd business : Many Germans watched the campaign of attacks on synagogues and jewish ownd businesses in 1938 with alarm and concern.

Summarize the project requirements and other assumptions : Overview: Imagine that you work as the project manager for an IT department. Your organization has recently approved the development of a mobile application. Summarize the project requirements and other assumptions

User Account

All Pages