Intro- Supply Chain Management
Problem : Supplier Selection
Your sourcing department has received bids from three suppliers shown below.
|
PERFORMANCE DIMENSION
|
IMPORTANCE
|
Supplier 1
|
Supplier 2
|
Supplier 3
|
|
On Time Delivery (% on time)
|
0.30
|
99%
|
97%
|
91%
|
|
Financial Stability (rating)
|
0.20
|
AA
|
A
|
BBB
|
|
Cost ($/unit)
|
0.50
|
$11.25/unit
|
$10.80/unit
|
$9.80/unit
|
1- Score each supplier's bid using the following scale.
|
On Time Delivery
|
|
Financial Stability
|
|
Cost
|
|
Range
|
Score
|
|
Rating
|
Score
|
|
Range
|
Score
|
|
<90%
|
1
|
|
Lower than BBB
|
1
|
|
>$12.00 per unit
|
1
|
|
91%-93%
|
2
|
|
BBB
|
2
|
|
$10.50-$11.99 per unit
|
2
|
|
94%-96%
|
3
|
|
A
|
3
|
|
$10.00-$10.49 per unit
|
3
|
|
97%-98%
|
4
|
|
AA
|
4
|
|
$9.50-9.99 per unit
|
4
|
|
99%+
|
5
|
|
AAA
|
5
|
|
<$9.50 per unit
|
5
|
2- Calculate the weighted average score for each supplier.