Calculate the weighted average score for each supplier.

Problem 2: Supplier Selection

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Question

Problem 2: Supplier Selection

Your sourcing department has received bids from three suppliers shown below.

PERFORMANCE DIMENSION	IMPORTANCE	Supplier 1	Supplier 2	Supplier 3
On Time Delivery (% on time)	0.50	97%	94%	88%
Excess Capacity (square feet of excess space)	0.40	11k sq. ft.	45k sq. ft.	80k sq. ft.
Cost ($/unit)	0.10	$3.50/unit	$3.75/unit	$2.55/unit

A) Score each supplier’s bid using the following scale.

On Time Delivery	Excess Capacity	Cost
Range	Score	Range	Score	Range	Score
<90%	1	<25k square feet	1	>$2.99 per unit	1
91%-93%	2	26k-35k square feet	2	$2.50-$2.98 per unit	2
94%-96%	3	36k-75k square feet	3	$2.25-$2.49 per unit	3
97%-98%	4	76k-125k square feet	4	$2.10-2.24 per unit	4
99%+	5	126k+ square feet	5	<$2.10 per unit	5

B) Calculate the weighted average score for each supplier.

C) Which supplier should be selected based on these criteria?

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