Question

1. Describe a comparison of Supplier Measurement and Evaluation systems in a tabular form. 2. Cost-based System and Supplier Performance Index Supplier Performance Report ending December 2018 Supplier: ABC Company Commodity: Integrated circuits for dishwashers A. 120 units were purchased @$79.95 per unit Nonperformance costs Event Number of Average cost occurrences per occurrence 9 $ 35 Late delivery Return to supplier 5 $ 19 Scrap labor cost $38 Testing and re-storage 11 St Compute the Supplier Performance Index (SPI) for this supplier. 3. Buyer A wishes to rate its vendors on quality, service, and management. The assigned weights to these factors are 50, 35, and 15, respectively. In this problem, quality has 3 subcategories. The service and management ratings also have 3 subcategories each. Subcategories also have weights. Find the total weighted performance score for the Supplier 1 & 2 out of 100. Which supplier would be the most satisfactory supplier? State reasons to support your recommendation. Category Supplier 1 Score Scores are out of 10 Weighted Score Supplier 2 Score Weighted Score Quality (weight = 5096) PPM defects 60% TQM 20% SPC 20 % Service (weight = 35) On-time deliveries 70% Technology 10% Agility 20% Management (weight = 15 Capability 40% Employees 30% Sustainability 30% Total (Weighted) Performance Score

Answer 1

1.

Categorical System	weighted point method	Cost based system
The buyer chooses the attributes most important to it and assigns preferred (+), neutral (o) or unsatisfactory (-) rating to each attribute. all the ratings are then added and the supplier with maximum rating is chosen	The buyer chooses the attributes most important to it and give each attribute a weight. Then the supplier is rated for each attribute and performance score is given to each attribute. all the performance scores are then added to find the best supplier.	In this method the total cost of doing business with supplier is calculated by the supplier performance index. SPI= (Purchase Price + Nonperformance Cost) / (Purchase Price)). in this method all the cost that buyer may need to incur in supplier fails are also considered.
Easy to implement	Medium Complexity	Medium Complexity
A lot of subjectivity present in this method	Gives a lot of flexibility to change weights on attributes based on business strategy	Least subjective of the three as it quantifies total cost of doing business with supplier

2. SPI = (Purchase Price + Nonperformance Cost) / (Purchase Price))

Purchase price= $79.95

number of unit= 120

total purchase price= 120*79.95=$9594

Nonperformance costs:

Late delivery = 9*35=$315

return to supplier= 5*19=$95

Scrap labor cost= 8*38=$304

testing and re-storage= 11*17=$187

total non performance cost= 315+95+304+187= $901

SPI= (9594+901)/9594=1.094

3.

	Total Weighted Score
Supplier 1	7.235
Supplier 2	7.605

Supplier 2 is most satisfactory Supplier as it has greater total weighted score value.

First calculate the weighted scores for each category: Quality , service and management

After that calculate the total weighted score by multiplying by the respected weight scores Quality 50% , service 35% and management 15%.

please find the pic below:

Scores out of 10 Suplier 1 Score Weighted Score Suplier 2 Score Weighted Score 4.8 1.2 3.6 1.6 1.8 1 1.4 7.4 2 Category 3 Quality (weight =50%) 4 PPM defects 60% 5 TOM 20% 6 SPC 20% 7 Total Quality 8 Service (weight =35%) 9 On tiem deliveries 70% 10 Technology 10% 11 Agility 20% 12 Total Service 13 Management (weight =15%) 14 Capability 40% 15 Employees 30% 16 Sustainability 30% 17 Total management 5.6 0.5 6.3 0.6 5 1 2.8 8 8 2.7 7.6 18 19 Total Weighted score 20 Supplier 1 21 Spplier 2 22 7.235 7.605

here is the pic with all excel formula:

Scores out of 10 Suplier 2 Score Suplier 1 Score Weighted Score Weighted Score =0.6*6 =0.2*8 =0.2*9 =SUM(C4:06) =0.6*8 =0.2*6 =0.2*7 =SUM(E4:E6) 1 2 Category 3 Quality (weight =50%) 4 PPM defects 60% 5 TQM 20% 6 SPC 20% 7 Total Quality 8 Service (weight =35%) 9 On tiem deliveries 70% 10 Technology 10% 11 Agility 20% 12 Total Service 13 Management (weight =15%) 14 Capability 40% 15 Employees 30% 16 Sustainability 30% 17 Total management =0.7*8 =0.1*5 =0.2*7 =SUM(C9:011) =0.7*9 =0.1*6 =0.2*5 =SUM(E9:E11) =0.4*8 =0.3*8 =0.3*6 =SUM(C14:016) =0.4*7 =0.3*9 =0.3*7 =SUM(E14:E16) 6 19 Total Weighted score 20 Supplier 1 21 Spplier 2 =0.5*7+0.35*7.5+0.15*7.4 =0.5*7.4+0.35*7.9+0.15*7.6 22