Book Title
10th Edition
ISBN: 9781337605656
Author: CROSS
Publisher: CENGAGE L
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Chapter 25, Problem 2RE
Summary Introduction
Case summary: The local people of Lake Caliopa, Minnesota have noticed that a high number of people are suffering from a lung ailment. The lung ailment was almost four to seven times the rate compared with the national average. They found that the smog emitted by a company CDA on the outskirts of the town was responsible for the lung disease. The company CDA was directed to install a new equipment to control air and water pollution by the Minnesota pollution control agency. Later citizens sued the company CDA.
To find: The standard for limiting emissions into the air which are to be met by the company CDA.
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Being in the procurement team for one of the major automotive companies such as GM or Toyota.
How to Appraise the best strategy to source for microchips based on portfolio analysis. Give reasons to support in the context of the automotive industry.
Note: The procurement spend on microchips is a small fraction of the Bill Of Materials
(BOM) of an automobile.
One of the challenging issues in determining the appropriate sourcing strategy is whether a company should choose 'single sourcing (i.e. the company buys the entire item from one supplier)' or multiple sourcing (i.e. the company buys an item from more than one suppliers)'.
Using the five objectives of procurement
Examine which procurement objectives can be best served via 'single sourcing.' Give reasons
Another issue in determining the appropriate sourcing strategy is whether to choose a large or small supplier. Again, show which procurement objectives can be best served with a large supplier. Provide supporting reasons.
According to 'AutoForecast Solutions', the global automotive industry lost 11.3 million units of production in 2021 due to the shortage of microchips. In fact, the shortage is one of the reasons that Tesla is not going to introduce new models of cars this year.
I have learned 'Portfolio Analysis' as a part of the strategic sourcing process. Would like to know what is the purpose of conducting portfolio analysis?
using own words and not a generic one
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