4. 5. Lincoln Lights is considering hiring one of three software firms to implement a new IT system. Lincoln management has decided to evaluate the firms on three dimensions- reputation, skill level, and price. Weights for each dimension, as well as performance ratings for each of the firms (1= "poor" to 5 = "excellent") are shown in the following table: Software Firm PC DIMENSION WEIGHT ALTREX TGI LTD. ASSOCIATES 5 4 2 Reputation Skill level Price 0.2 0.4 0.4 3 5 5 443 a. (*) Use the weighted-point evaluation system to cal- culate weighted performance scores for each of the software firms. Would the results change if each dimension had a weight of one-third? b. (**) In Chapter 2, we described order qualifiers as per- formance dimensions on which customers demand a minimum level of performance. Basically, if a supplier fails to meet the minimum requirements on any of the qualifiers, that supplier would be eliminated from contention. How would you incorporate the concept of order qualifiers into the weighted-point evaluation system?
4. 5. Lincoln Lights is considering hiring one of three software firms to implement a new IT system. Lincoln management has decided to evaluate the firms on three dimensions- reputation, skill level, and price. Weights for each dimension, as well as performance ratings for each of the firms (1= "poor" to 5 = "excellent") are shown in the following table: Software Firm PC DIMENSION WEIGHT ALTREX TGI LTD. ASSOCIATES 5 4 2 Reputation Skill level Price 0.2 0.4 0.4 3 5 5 443 a. (*) Use the weighted-point evaluation system to cal- culate weighted performance scores for each of the software firms. Would the results change if each dimension had a weight of one-third? b. (**) In Chapter 2, we described order qualifiers as per- formance dimensions on which customers demand a minimum level of performance. Basically, if a supplier fails to meet the minimum requirements on any of the qualifiers, that supplier would be eliminated from contention. How would you incorporate the concept of order qualifiers into the weighted-point evaluation system?
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Question as in the attached photo from page 218 Question 5
Note: Give full explanation with clear indication to the problem’s aspect. Use information provided in table 7.8 , 7.7
(*) Use the weighted-point evaluation system to cal- culate weighted performance scores for each of the software firms. Would the results change if each dimension had a weight of one-third?
(**) In Chapter 2, we described order qualifiers as per- formance dimensions on which customers demand a minimum level of performance. Basically, if a supplier fails to meet the minimum requirements on any of the qualifiers, that supplier would be eliminated from contention. How would you incorporate the concept of order qualifiers into the weighted-point evaluation system?
Transcribed Image Text:218 PART III ESTABLISHING SUPPLY CHAIN LINKAGES
4.
5. Lincoln Lights is considering hiring one of three software
firms to implement a new IT system. Lincoln management
has decided to evaluate the firms on three dimensions-
reputation, skill level, and price. Weights for each dimension,
as well as performance ratings for each of the firms (1=
"poor" to 5 = "excellent") are shown in the following table:
Software Firm
PC
DIMENSION WEIGHT ALTREX TGI LTD. ASSOCIATES
5
4
2
Reputation
Skill level
Price
0.2
0.4
0.4
355
443
a. (*) Use the weighted-point evaluation system to cal-
culate weighted performance scores for each of the
software firms. Would the results change if each
dimension had a weight of one-third?
b. (**) In Chapter 2, we described order qualifiers as per-
formance dimensions on which customers demand a
minimum level of performance. Basically, if a supplier
fails to meet the minimum requirements on any of
the qualifiers, that supplier would be eliminated from
contention. How would you incorporate the concept
of order qualifiers into the weighted-point evaluation
system?
Transcribed Image Text:TABLE 7.7
Advantages and
Disadvantages of
Insourcing and
Outsourcing
TABLE 7.8
Factors That Affect
the Decision to
Insource or
Outsource
ADVANTAGES
High degree of control
Ability to oversee the entire process
Economies of scale and/or scope
ADVANTAGES
High strategic flexibility
Low investment risk
Improved cash flow
Access to state-of-the-art
products and services
CHAPTER 7 SUPPLY MANAGEMENT 201
Insourcing
DISADVANTAGES
Reduced strategic flexibility
Required high investment
Potential suppliers may offer superior products and services
Outsourcing
DISADVANTAGES
Possibility of choosing a bad supplier
Loss of control over the process and core technologies
Communication/coordination challenges
Increased risk of supply chain disruption
Customer social responsibility (CSR) risks
Environmental uncertainty
Competition in the supplier market
Ability to monitor supplier's
performance
Relationship of product/service to
buying firm's core competencies
FAVORS
INSOURCING
Low
Low
Low
High
FAVORS
OUTSOURCING
High
High
High
Low
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