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Written Assignment Week 4

The document discusses a case study on selecting a supplier based on quality, delivery time, and price. Three suppliers (A, B, C) are evaluated using the linear average method, which weights each criteria. Supplier B scores highest overall but has financial issues. Supplier A is an overseas supplier with a 3-week delivery time but offers high quality and low price. The document concludes that Supplier A should be selected since the company can implement inventory management strategies to account for the longer delivery time and ensure quality and cost savings over the long run. Supplier C is an alternative if immediate purchases are needed due to its proximity.

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338 views

Written Assignment Week 4

The document discusses a case study on selecting a supplier based on quality, delivery time, and price. Three suppliers (A, B, C) are evaluated using the linear average method, which weights each criteria. Supplier B scores highest overall but has financial issues. Supplier A is an overseas supplier with a 3-week delivery time but offers high quality and low price. The document concludes that Supplier A should be selected since the company can implement inventory management strategies to account for the longer delivery time and ensure quality and cost savings over the long run. Supplier C is an alternative if immediate purchases are needed due to its proximity.

Uploaded by

Maylyn
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Running head: SUPPLIER SELECTION PROCESS

Written Assignment Week 4

Supplier Selection Process: Quality and Time in Focus

BUS 5116 Operations Management

Term 5, 2018-2019

University of the People


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SUPPLIER SELECTION PROCESS

Supplier Selection Process: Quality and Time in Focus

Supplier Selection Process

A supplier, also known as a vendor, is an entity in the supply chain that provides goods or

services to another entity (Grant & Kagan, 2019). The supplier may operate as the manufacturer

or as the middle-man such as distributors and retailers, and trade in a business-to-business or

business-to-customer setup (Grant & Kagan, 2019). Suppliers play an important role in the

supply chain as businesses depend on the suppliers to provide the raw materials required to

manufacture goods or in some cases, suppliers deliver the finished goods to the retailers or end-

users (Martin, 2019). Therefore, it is essential for a company to identify and select their suppliers

carefully. Companies may employ different selection process following the criteria aligned to

their business strategies (Lu, 2011). There are three different approaches in supplier selection,

first is based on product offering, second is based on supplier capability, and third is a

combination of both product and capability (Lu, 2011). The supplier’s capability is measured

using a company’s designated assessment criteria and the company may utilize one or more

quantitative tools to facilitate in the selection process (Lu, 2011). These quantitative tools are

known as the Categorical Method, Cost-Ratio Method, and Linear Average Method (Lu, 2011).

Case Study

The case study focuses on the selection of a supplier which will be based on three

selection criteria: Price, Quality, and Delivery. In a market where the qualifying and winning

factors are quality and time, a company must select a reliable supplier that can provide high-

quality materials in as little time possible. To do this, the Linear Average Method will be used

by assigning a weight to reflect the relative importance of each criterion (Lu, 2011). The three
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criteria shall be given weight as: Quality - 45%, Delivery - 30%, and Price - 35%. In addition to

these criteria, other factors to be considered for each supplier are:

 Supplier A – Overseas supplier with transport lead time of three weeks


 Supplier B – A supplier facing financial issues
 Supplier C – Proximity supplier with transport lead time of three hours

Table 1: Selection of Suppliers Using Linear Average Method

Selection Supplier A Supplier B Supplier C


Weight
Criteria Score Total Score Total Score Total
Price 25 9 225 10.5 250 8.5 212.5
Quality 45 9 405 10 450 8.5 382.5
Delivery 30 9.5 285 10 300 9.5 285
Total 915 1012.5 880

Based on the above results, Supplier B is deemed to be the preferred supplier given that

its price, quality, and delivery scores outperform the other suppliers. However, one factor that

should also be considered is the supplier’s financial stability to ensure undisrupted supply of

material and Supplier B does not pass on this. If a supplier goes out of business, the whole

supply chain will be affected which may result in financial loss or even legal repercussions.

Taking into consideration the overall accumulated scores, I would select Supplier A, even

though it is an overseas supplier with a transport lead time of three weeks. The rationale for

choosing Supplier A is that the inventory management system that the company will use is not

specified in the case study and given that the contract with the supplier will be long-term, it is

assumed that the company will follow an integrated systematic process that involves strategic

planning, scheduling, and inventory control. In the course of its operation, the company will

accumulate sufficient accurate data to forecast the demand for the material and be able to order

from Supplier A ahead of time. Furthermore, the price and quality of the materials should not be
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compromised over time factor, especially if a systematic operational process is in place. These

factors, in the long run, will provide more benefit to the company in terms of cost-savings.

Supplier C can fit as an alternative if immediate purchase of the material will be required.

Choosing a supplier within proximity is beneficial for companies that utilize the Just in Time

method wherein the inventory is purchased just as an order is received from the customer

(Peavler, 2019).

If the company’s factors changed to price and quality, I would still elect Supplier A since

they offer cost-effective and higher quality products.

In conclusion, businesses are reliant to suppliers to manufacture the products that the

customers’ demand and the company should assess its suppliers using multiple quantitative tools

to arrive at the best choice. The procurement officer should look into various factors that are

important to the company such as cost, value, flexibility, commitment, competency, consistency,

and location. It is important to note that good quality materials from reliable and stable suppliers

will ensure that the company will be able to produce good quality products.
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SUPPLIER SELECTION PROCESS

References

Grant, M. & Kagan, J. (2019, June 9). Vendor. Investopedia. Retrieved from

https://www.investopedia.com/terms/v/vendor.asp

Lu, D. (2011). Fundamentals of supply chain management. Bookboon.com, Retrieved from

https://my.uopeople.edu/pluginfile.php/515707/mod_page/content/9/BUS5116Lu.pdf

Martin, M. (2019, January 11). Roles and activities of stakeholders. Chron.com. Retrieved from

https://smallbusiness.chron.com/role-activities-stakeholders-31182.html

Peavler, R. (2019, June 10). Inventory management. The Balances MB. Retrieved from

https://www.thebalancesmb.com/just-in-time-jit-inventory-management-393301

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