Operations Management
Operations Management
11th Edition
ISBN: 9780132921145
Author: Jay Heizer
Publisher: PEARSON
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Chapter 2, Problem 8P

a)

Summary Introduction

To determine: The suitable outsourcing provider using factor- rating method.

Introduction:

Factor-rating method:

The factor-rating method is a quantitative approach used to make a decision from various alternatives such that the decision is beneficial to the firm involved. This method is utilized to decide on a new layout, new locations, best supplier, outsourcing providers etc.

b)

Summary Introduction

To determine: The impact of doubling the weights used in part (a).

Introduction:

Factor-rating method:

The factor-rating method is a quantitative approach used to make a decision from various alternatives such that the decision is beneficial to the firm involved. This method is utilized to decide on a new layout, new locations, best supplier, outsourcing providers etc.

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Claudia Pragram Technologies, Inc., has narrowed its choice of outsourcing provider to two firms located in different countries. Pragram wants to decide which one of the two countries is the better choice, based on risk-avoidance criteria. She has polled her executives and established four criteria. The resulting ratings for the two countries are presented in the table below, where 1 is a lower risk and 3 is a higher risk. The executives have determined four criteria weightings: Price, with a weight of 0.1; Nearness, with 0.6; Technology, with 0.2; and History, with 0.1. a) Using the factor-rating method, which country would you select? b) Double each of the weights used in part (a) (to 0.2, 1.2, 0.4, and 0.2, respectively). What effect does this have on your answer? Why?
Victor Pimentel, purchasing manager of Office Supply Center of Mexico, is searching for a new supplier for its paper. The mostimportant supplier criteria for Victor include paper quality, delivery reliability, customer service, and financial condition, and hebelieves that paper quality is twice as important as each of the other three criteria. Victor has narrowed the choice to two suppliers,and his staff has rated each supplier on each criterion (using a scale of 1 to 100, with 100 being highest), as shown in the followingtable: PAPER QUALITY DELIVERY RELIABILITY CUSTOMER SERVICE FINANCIAL CONDITIONMonterrey Paper 85 70 65 80Papel Grande 80 90 95 75Use the factor-weighting approach to determine the best supplier choice.
Claudia Pragram Technologies, Inc., has narrowed its choice of outsourcing provider to two firms located in dif-ferent countries. Pragram wants to decide which one of the two countries is the better choice, based on risk-avoidance criteria. She has polled her executives and established four crite-ria. The resulting ratings for the two countries are presented in the table below, where 1 is a lower risk and 3 is a higher risk.  SELECTION CRITERION ENGLAND CANADAPrice of service from outsourcer 2 3Nearness of facilities to client 3 1Level of technology 1 3History of successful outsourcing 1 2The executives have determined four criteria weightings: Price,with a weight of 0.1; Nearness, with 0.6; Technology, with 0.2;and History, with 0.1.a) Using the factor-rating method, which country would youselect?b) Double each of the weights used in part (a) (to 0.2, 1.2, 0.4,and 0.2, respectively). What effect does this have on youranswer? Why?
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