Supply Chain Question
Learning Goal: I’m working on a supply chain multi-part question and need an explanation and answer to help me learn.
Your manager has decided to reduce the number of suppliers for a critical subassembly from three to two. She has asked you to review the three current suppliers (A, B, and C) and to recommend which one to eliminate from the approved suppliers list. You confer on the ground rules and agree that a multiplier of three will be assigned for best performance in a category, two for second place, and one for last place.
You have been provided the following data:
- Quality is the leading attribute to be considered and has been assigned a 45% weighting. The best record for quality has been achieved by Supplier C, followed by Supplier A, and Supplier B in last place.
- Warranty length is the second most important attribute with a 30% weight. Warranties are three years for Supplier A, five years for Supplier B, and two years for Supplier C.
- Cost is the last consideration with a relative weight of 25%. Subassemblies from Suppliers A and C each cost $7500 while those from Supplier B cost $6500. All values include shipping and delivery charges.
Create a simple MS Excel spreadsheet to enter the relevant data and to calculate the composite score for each of the three suppliers.