Premium Essay

Supplier Selection

In: Business and Management

Submitted By sarbesh
Words 503
Pages 3
Sarbesh Rath

1. Consider the different suppliers – which one would you select? What type of agreement would you use?

According to market study and proper strategies presented by supplier A the agreements would be
- A pricing schedule which is dependent on the building’s load factor
- A “Net 30 days” payment term with a 0.3% discount if payment is made within 10 days
- Access to a diverse group of energy service companies
Also we can negotiate according to our needs. Purchase order specifications:
• Contract Purchase order
• Payment terms net 30 days and different taxes
• Terms and conditions regarding unavailability of power, uncalled power cuts.
• Including Indemnification, right to audit, limitation of liability, changes according to market price(or fixed)

2. What are the risks and rewards to consider in this case? How can the team balance these risks and rewards?

In this case we have different suppliers but the best suited is Company A. We will consider the rewards and risks of considering single sourcing.
Rewards:
• Having a single source A means less work to qualify the source and probably less administrative effort in dealing with them.
• Since all of their volume is given to source A, the buyer has maximized his leverage based on total volume of energy. The buyer should make sure that this point is emphasized during the negotiations concerning price, etc.
• The energy supplier A feels special obligation to help the manufacturer in terms of availability, etc.
• Easier to track down the source of problems as well as affected products in the event of a quality investigation/recall

Risks:
• Risk can be defined as the magnitude of exposure to financial loss or operational disruption and stems from uncertainty. What if the single source A goes on strike or has a fire at its facility, disrupting its energy process...

Similar Documents

Premium Essay

Supplier Selection

...Supplier Selection by Damian Beil Stephen M. Ross School of Business July 2009 Abstract: Supplier selection is the process by which firms identify, evaluate, and contract with suppliers. The supplier selection process deploys a tremendous amount of a firm’s financial resources. In return, firms expect significant benefits from contracting with suppliers offering high value. This article describes the typical steps of supplier selection processes: identifying suppliers, soliciting information from suppliers, setting contract terms, negotiating with suppliers, and evaluating suppliers. It highlights why each step is important, how the steps are interrelated, and how the resulting complexity provides fertile ground for ORMS research. Today the average U.S. manufacturer spends roughly half its revenue to purchase goods and services [1]. This makes a company’s success dependent on their interactions with suppliers. The role of procurement managers (buyers) within companies has become extremely important, often involving staggering dollar values: A recent cross-industry survey of companies — in areas ranging from aerospace to semiconductors — placed companies’ average total spend per procurement employee at $115 million [2]. With so much of a company’s money on the line, and increasing reliance on outsourcing of many complex services and products, the job of a buyer is not only important but also challenging. Buyers must define and measure what “best value” means for the buying......

Words: 7844 - Pages: 32

Premium Essay

Supplier Selection

...flapshrouds and bay doors from Dollard Plastics of Montreal. The latter showed no flexibility on reducingtheir prices on the above parts when the former was in search of ways to improve their productionefficiencies by reducing the cost attributed to Dash 8 airplane. Kim Tomar, the Financial Analyst at DeHavilland had realized that issue and therefore started the process of finding a new business partner whois capable of meeting a set of standards that De Havilland had developed earlier for their procurementdepartment, had started the process about year and half earlier than the expiry date with the incumbentsupplier.After receiving 9 bids to supply the needed parts, I have recommended Morton to De Havilland’sSource Selection Board (SSB) as prospective vendor for selection provided that Mortonmust pass the set of standards which I mentioned above. Based on the initial information fromthe normalized bids from all nine bidders, the lowest bid was Morton Enterprises. Their bid was18% lower than their nearest competitor, and when I compared prices of the needed components tothe prices supplied by current providers they were between 54% and 75% less expensive.However, beyond parts cost reduction we are also interested in establishing long-termco-operative contracts with the vendor. So, apart from determining who had the best price offer, I needto determine whether Morton is sufficiently stable to be relied upon in the long run. So my strategicintention here is to negotiate an......

Words: 312 - Pages: 2

Free Essay

Caterpillar Supplier Selection

...Caterpillar Supplier Selection Question#01 Review Caterpillar’s process for early supplier involvement. What was critical to the success of the relationship? The relationship between a supplier and buyer can be a complex one. Each party wants to maximize its time, resources, and cash investment; these may be competing priorities that can strain the relationship. As per this case study it shows that M/s. Caterpillar was dissatisfied with its current supplier and they want to reduce their overhead cost through outsourcing. Therefore M/s. Caterpillar selects M/s. Delco Electronics and started working with the same. Selection of M/s. Delco Electronics by M/s. Caterpillar involves the following phases.  Pre-qualification of supplier  Performance evaluation  Official visits to M/s. Delco’s HQ  Visit to Engineering Facility  Production capacity unit The critical thing to the supplier-buyer relationship is Trust, as its always difficult to start a business with new supplier. Evaluation should be done properly before selection. Have meetings, discussions, both partners have proper communication channel. Question#02 How important was the role of specific individuals involved in the discussion? What does this say about the importance of trust in managing buyer-supplier relationships in such an environment, and the role of individuals in the relationship? The role of specific individuals are very important during discussion because of having enormous......

Words: 304 - Pages: 2

Premium Essay

Caterpillar Supplier Selection

...Question#01 Review Caterpillar’s process for early supplier involvement. What was critical to the success of the relationship? The relationship between a supplier and buyer can be a complex one. Each party wants to maximize its time, resources, and cash investment; these may be competing priorities that can strain the relationship. As per this case study it shows that M/s. Caterpillar was dissatisfied with its current supplier and they want to reduce their overhead cost through outsourcing. Therefore M/s. Caterpillar selects M/s. Delco Electronics and started working with the same. Selection of M/s. Delco Electronics by M/s. Caterpillar involves the following phases.  Pre-qualification of supplier  Performance evaluation  Official visits to M/s. Delco’s HQ  Visit to Engineering Facility  Production capacity unit The critical thing to the supplier-buyer relationship is Trust, as its always difficult to start a business with new supplier. Evaluation should be done properly before selection. Have meetings, discussions, both partners have proper communication channel. Question#02 How important was the role of specific individuals involved in the discussion? What does this say about the importance of trust in managing buyer-supplier relationships in such an environment, and the role of individuals in the relationship? The role of specific individuals are very important during discussion because of having enormous responsibilities like monitoring and......

Words: 553 - Pages: 3

Premium Essay

Supplier-Selection-Criteria-and-Methods-in-Supply-Chains-a-Review

...Educational, Economic and Management Engineering Vol:7, No:10, 2013 Supplier Selection Criteria and Methods in Supply Chains: A Review Om Pal, Amit Kumar Gupta, R. K. Garg International Science Index Vol:7, No:10, 2013 waset.org/Publication/16944 Abstract—An effective supplier selection process is very important to the success of any manufacturing organization. The main objective of supplier selection process is to reduce purchase risk, maximize overall value to the purchaser, and develop closeness and long-term relationships between buyers and suppliers in today’s competitive industrial scenario. The literature on supplier selection criteria and methods is full of various analytical and heuristic approaches. Some researchers have developed hybrid models by combining more than one type of selection methods. It is felt that supplier selection criteria and method is still a critical issue for the manufacturing industries therefore in the present paper the literature has been thoroughly reviewed and critically analyzed to address the issue. Keywords—Supplier selection, Mathematical Programming. AHP, ANP, TOPSIS, I. INTRODUCTION I N most industries, the cost of raw materials and component parts represents the largest percentage of the total product cost. For instance, in high technology firms, purchased materials and services account for up to 80% of the total product cost. Therefore, selecting the right suppliers is the key to procurement process and represents a major......

Words: 6221 - Pages: 25

Premium Essay

Case: Reducing Supplier Evaluation Cycle Time

...| mid1980s to 2003 | 18 months= 1.5yrs | As Emily thought about what she had heard, she came to two conclusions. First, the food products industry was beginning to see the same kinds of market pressures that rapidly changing industries, such as automobiles and electronics, have experienced for many years. For example, she knew that the life cycles of her company’s products were getting shorter and shorter. Second, Emily knew very well that while not all supplier evaluation and selection decisions originated during the development of new products, many of the critical selection decisions were the result of new product needs. Other point that Emily was very interesting is analyze to reduce the time it takes to evaluate and select suppliers by 30 percent, 40 percent, or even 50 percent. Questions: 1. Why should companies commit time and resources to evaluate and select suppliers? The evaluation and selection of supplier is one of the most important functions of business. A focus on selecting only the best supplier possible will make a major contribution to the competitiveness of entire...

Words: 676 - Pages: 3

Free Essay

Human Resource Management

...What are the main factors that multinational enterprises will usually take into account in the selection process for high caliber employees on international assignments? As international assignments are always costly to multinational enterprises and they have to provide training and allowances for the expatriates, they have to select expatriates carefully to avoid international assignment failure. In order to select the suitable candidates and have a successful performance in the international assignment, the multinational enterprises would consider the technical abilities and managerial skills, cross-cultural suitability, family requirements, country requirements and situational factors in the selection decision. The selection criteria include technical abilities and managerial skills as the expatriates are going to work abroad, the system, political, legal structures may be different and the headquarters’ technical expertise cannot provide advises on the matters related to the job often. Therefore, the expatriates must be experiential, technical and with good managerial skills to adapt into the new working environment. Besides, the expatriates may work in a place/country with totally different culture and the cultural environment is important to determine successful performance so the cross-cultural suitability is also one of the selection criteria. The expatriates require cross-cultural abilities such as cultural empathy, adaptability, diplomacy, positive......

Words: 627 - Pages: 3

Premium Essay

Decisions of Uncertainity

...Decisions of Uncertainty Introduction The Decision What is the probability of hiring a qualified employee upon selecting one from 52 applicants 26 are male and 26 are female? Probability Concepts The probability of the event –hiring a qualified male employee—is the proportion of times the company would expect to obtain a qualified male employee over the long run if the HR managers selected applicants many times. I will refer to each repetition of the situation – in this case the selection of a qualified male future employee—as a sampling experiment. The probability of the event is the proportion of times we would expect the event to occur in an infinitely long series of identical sampling experiments. The Outcome In this case, the probability of selecting a qualified male employee is 0 .50 or 50%. I arrived at this conclusion by using the knowledge that there are 52 applicants who areapplying for the open position, 26 are female and 26 are male. If the company assume that each of the 52 possibilities is equally likely, it is reasonable to expect that the company would select a male applicant that is qualified for the open position 0.50 of the time of a period of time ( 26/52 = ½ = 0.50 ). This illustrates the basic rule for obtaining probabilities in situations in which each of the possible outcomes is equally likely, the probability of the occurrence of an event is equal to the proportion of the possible outcomes characterized by the event. In the case......

Words: 341 - Pages: 2

Free Essay

Delegate Replication Rights to Non-Admins

...Task 1 of 2 Create a Universal Group called Replication Management Admins in an OU you’ve chosen to hold groups for delegated access or other security related task. Open ADSI Edit and connect to the Configuration Naming Context as seen in the image below. Once you've selected Configuration in "Select a well known Naming Context", click OK Expand the Configuration Naming context and right click the Naming Context node below it. See the picture below for the arrow indicating where you should right-click. Next Click Properties Click the Security Tab Click the Advanced button Click Add Enter the name of the Universal Group you created in Step 1 and click OK In the Permission Entry for Configuration box scroll to the bottom and tic the Allow box for the Replication Synchronization permission. Ensure that "This object and all child objects" is selected for the Apply to and click OK Click Apply, then OK, and then click OK once more and you should be back to ADSI Edit with no open dialog boxes. Task 2 of 2 After you’ve completed steps 1-10 in Task 1 you'll need to view all the replicated partitions and do the same process for each partition. Click on CN=Partitions under CN=Configuration, DC= to view the partitions in the Configuration naming context. On each partition right click each object and select New Connection to Naming Context. Note: You don't have to do this for...

Words: 354 - Pages: 2

Free Essay

Information System Briefing

...risks due to potential loss of funding” (Wager, Lee, & Glaser, 2009, para. 9). Implementing a new software system will benefit the Mobile Mammography Van greatly. This paper is intended to identify the process for selecting and acquiring an information system, explain how the organizations goals drive the selection process, and identify the roles each organization’s stakeholders play in the selection process. Selecting and Acquiring an Information System When an organization is selecting and acquiring a new information system there is a great deal of planning and steps they must take to implement the system properly. The first step is to establish a project steering committee. “This committee’s primary function is to plan, organize, coordinate, and manage all aspects of the acquisition process” (Wager, et. al., 2009, pg. 150). After the committee has been formed the project goals should be outlines along with the scope of the project and committee. Many questions will need to be discussed during this step. For example, the committee will need to determine the methods, processes, communication techniques, resources, and type of system that will be used through the selection and acquisition process. Once project goals and the scope of the project are defined the next step is to screen the marketplace and review vendor profiles. “Concurrently with the...

Words: 985 - Pages: 4

Premium Essay

Skyline

...Name :Muhammad Musab Hussain ID:7601 Subject :MGM411 Human resource a,Analyze the job selected position and wirte their job description and job specification? Ans, description * Sales of companies goods and services * Building relationship with customers * Responsible for repeat sales of existing customers * Approaching customer with the aim of making new business deals * Presenting the product or service in a professional or structured way * Researching the market * Checking the inventory for products * Responding to incoming emails and phone calls * Attending team meeting and providing valuable feedback Specification * Strong sales skills * Communication skills * Bachelor’s degree * Master’s degree * Ability to multitask * Delivering revenue or exceeding target * 3 years minimum experience in sales * Organizational and time management skills * Negotiating and closing sales B,what method will you adopt for appointing a person on the selected position? Ans, 1. Top management approval 2. Advertisement development 3. Post advertisement on the news paper 4. Call the people for interviews 5. Conducts interviews 6. Select the people which best match the requirement 7. Further skim them 8. Conduct another interview 9. Upon approval select the final people for hiring 10. Conduct the physical examination 11. Hire people that pass the final......

Words: 355 - Pages: 2

Free Essay

Html Css 6th Edition Chapter 6 Video Quiz Questions

...type attribute, browsers assume you are creating a(n): a. file input box b. text input box ***** c. hidden input box d. image input box 3. What is required in the syntax when you need to refer to the control element? a. checkbox b. form label c. id attribute ******** d. name asterisk 4. The asterisk in Name* tells users that Name is a(n): a. id attribute b. required field ******* c. form label d. inline element 5. You create a selection list using the: a. id attribute b. name attribute c. option element d. selection element ******* 6. Which term defines the number of options that the selection list displays at one time? a. element b. control c. value **** d. field 7. Consider your audience and its initial reaction to a selection list when setting the: a. size attribute ****** b. list control c. style coding d. type option 8. The name attribute provides the name of the: a. field value b. selection list c. style sheet d. data field ***** 9. To create an option button, use the input element with the type attribute set to a value of: a. file b. image c. radio ******* d. text 10. When you use the same name for two or more option buttons, browsers treat them as a group, so selecting one option button automatically: a. highlights all the others b. selects all of the others c. deletes all the others d. deselects all of the others......

Words: 449 - Pages: 2

Free Essay

Human Resource Management

...Chapter -6 Employee Testing And Selection The importance of Selecting the Right Employee: If the Right Employee is not selected then there will be some problem like fall of organization,low performance,cost of recriting and hiring .there may 3problem feced by the employer if he Select wrong person  Organizational performance  Cost of Recruiting and hiring  Legal Obligation and Liability Organizational Performance: Employee performance affects organizational performance.Organizational performance including stragic planner operation,finance.legal and organizational development will fall if the employer select the wrong candidate Perfromance differ for different employee The Costof Recruitong and hiring:The cost of simlpy finding the right person recruiting cost.if wrong person hired the the organization have to take another Interview ,advertige so that will increase the cost of the organization Legal Obligation and Liability:The candidate who apply for the job may be he/she be a bad person .He may have Criminal activities.so these Candidate can do Crime in the organization or harm the organization   Avoiding Negliting hiring claims: • Carefully Scrutinze information on employment applications.the information about candidate provided on the application should be read very carefully • Get Written......

Words: 296 - Pages: 2

Free Essay

Lab Report

...1 )   Create a new query in Query Design, including the Employee Info and Sales by Employee tables. Add the First Name and Last Name fields from the Employee Info table, and the Quarter and Actual Sales fields from the Sales by Employee table (in that order). Run the query.   Ribbon 1. | Click the CREATE tab. | 2. | On the CREATE tab, in the Queries group, click Query Design. | 3. | In the Show Table dialog box, with the Employee Info table selected, click Add. | 4. | Click the Sales by Employee table and then click Add. | 5. | Click Close in the Show Table dialog box. | 6. | In the query design window, in the Employee Info table, double-click the First Name field. | 7. | In the query design window, in the Employee Info table, double-click the Last Name field. | 8. | In the query design window, in the Sales by Employee table, double-click the Quarter field. | 9. | In the query design window, in the Sales by Employee table, double-click the Actual Sales field. | 10. | On the DESIGN tab, in the Results group, click Run. | |   Keyboard 1. | Press ALT (or F10, or F6 two times), C, and then QD. | 2. | In the Show Table dialog box, with Employee Info selected press ALT+A (or ENTER or TAB to select the Add button, and then press ENTER (or A or SPACEBAR)). | 3. | Press S (or use ARROW keys) to select the Sales by Employee table, and then press ALT+A (or ENTER or TAB to select the Add button, and then press ENTER (or A or......

Words: 10463 - Pages: 42

Premium Essay

Consumer Studies

...MDSE 3750 Consumer Studies Semester Project Objectives: * To provide students with the opportunity to apply course concepts and ideas to a specific brand/product * Develop your team building, * Refine time management skills, * Apply written and oral communication skills. Procedures: Groups and Brand Selection 1. Groups of three people will be formed. You will have a window of opportunity to select your own group; students not selecting a group will be placed in one. * Sign-up Deadline: Midnight, September 24 * All student not in a group by the time Dr. Kinley logs on September 25 will be placed into a group. 2. You will be asked to select a brand (of product or store) to focus on for the semester. 3. Once groups are formed, students will submit their “top 3” list in the Bb Discussion Board, which will open on September 25. Dr. Kinley will make the final selections for each group. Your Top 3 should be in order of preference. **** NOTE: This discussion board will be in the “Discussion” menu-item on the left-menu of Bb. DO NOT POST YOUR PREFRENCES IN YOUR GROUP DISCUSSION BOARD. Project: After the brand/product is selected, your group will focus on that specific product and relate it to all concepts we discuss in class. Your team will keep a running wiki of how each chapter’s materials relate to the product (starting with Text Chapter 3). In some chapters, there will be more to discuss than others. ......

Words: 654 - Pages: 3