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Written Assignemnt Unit 4 OM

The document analyzes three potential suppliers (A, B, C) for outsourcing based on price, quality, and delivery. Supplier C is selected as the optimal choice due to its cost-effectiveness, meeting quality standards, and timely delivery within 3 hours. Supplier B could be considered if priorities shift to price and quality, but it faces financial issues so risk mitigation is needed.

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10 views3 pages

Written Assignemnt Unit 4 OM

The document analyzes three potential suppliers (A, B, C) for outsourcing based on price, quality, and delivery. Supplier C is selected as the optimal choice due to its cost-effectiveness, meeting quality standards, and timely delivery within 3 hours. Supplier B could be considered if priorities shift to price and quality, but it faces financial issues so risk mitigation is needed.

Uploaded by

amolek94
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Written Assignemnt Unit 4

BUS 5116-01 Operations Management - AY2024-T3

Group 0002

Maciej Olek

Dr. Derrick Randall

27 February 2024
The presented case involves the task of selecting a supplier for outsourcing a complex part of

the company's value chain. As the Procurement Analyst, the objective is to propose the best

supplier for a 3-year outsourcing period, considering factors such as price, quality, and

delivery. The major issues revolve around making a strategic decision that aligns with the

company's priorities, which currently emphasize quality and timely delivery.

The analysis delves into the details of three potential suppliers (A, B, and C) and evaluates

their performance in terms of price, quality, and delivery. A comprehensive examination of

the supplier attributes, such as financial stability, proximity, and transportation lead times, is

conducted to provide a thorough understanding of each option. The depth of the analysis

ensures a nuanced consideration of the factors that impact the supplier selection decision.

1. Selection of Supplier C:

Price (85%): Supplier C is not only cost-effective but also aligns with the company's target

price, scoring 85%. This makes it a financially viable option for the outsourcing decision.

Quality (85%): With a quality score of 85%, Supplier C meets the company's emphasis on

delivering high-quality parts, ensuring that the products meet the required standards.

Delivery (95%): Supplier C outperforms in timely delivery with a score of 95%. The

proximity of the supplier, with a transport lead time of 3 hours, ensures quick and efficient

delivery to meet customer expectations.

Others (Proximity): The proximity of Supplier C not only contributes to timely delivery but

also reduces the risks associated with longer transportation lead times, such as potential

damages or delays.

Rationale: The combination of cost-effectiveness, quality, and timely delivery positions

Supplier C as the optimal choice for outsourcing a complex part of the company's value chain.
2. Considerations for Supplier B (Price and Quality Focus):

Price (105%): Although slightly above the target price, Supplier B's cost is still within a

competitive range at 105%. The company may consider negotiating with Supplier B to bring

the cost closer to the target.

Quality (100%): Supplier B excels in quality with a score of 100%, indicating that all parts

delivered meet the required standards. This is crucial for maintaining the company's

reputation for delivering high-quality products.

Delivery (100%): Despite facing financial issues, Supplier B maintains a perfect score in

timely delivery (100%), ensuring that the products are delivered as per the agreed-upon

schedule.

Rationale: If the company's priorities shift towards price and quality, Supplier B becomes a

strong contender due to its excellent quality performance, even though there are financial

concerns. The company should, however, implement risk mitigation strategies, such as closer

monitoring, supplier collaboration, or securing backup options.

Supplier A is not the preferred choice due to a slightly higher price (90%), a quality score not

being the highest (90%), and the challenge of a 3-week transport lead time as it is an overseas

supplier. Supplier C offers a better balance in cost, quality, and delivery with a transport lead

time of 3 hours, making it the more suitable option.

In conclusion, while Supplier C remains the preferred choice based on the initial criteria,

Supplier B becomes a viable alternative when the focus shifts to price and quality. A

comprehensive risk mitigation plan should be incorporated into the proposal to address

potential financial issues with Supplier B.

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