Julie WIlliams need to make a choice between two of the following 2 suppliers Su
ID: 351363 • Letter: J
Question
Julie WIlliams need to make a choice between two of the following 2 suppliers
Supplier 1: selling price $12 per unit ( 1 unit = 1000 lbs) average lead time is 1 week, standard deviation of lead time =.5 week. Batch or lot size = 2000 units
Supplier 2: selling price $10 per unit ( 1 unit = 1000 lbs) average lead time is 2 week, standard deviation of lead time = 1 week. Batch or lot size = 4000 units
Answer the following questions:
A. Which supplier should Julie choose based on minimizing total cost, if her inventory holding cost h = .15 and her desire target CSL = 90%?
B. Create a supplier scorecard that Julie can use to compare different suppliers
Explanation / Answer
B. supplier score card should contain following aspects on which julie should judge the suppliers -
1.cost of material
2.lead time
3.deviation from average lead time
4. inventory carrying cost
5.does julie has any backup if supplies donot reach her when required
6. cost of shortage of inventory - loss due to unavailability of inventory when required which can lead to stoppage in production.
Thus above all aspects are vital while preparing a score card.
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