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Megah Teraju Sdn Bhd manufactures cooling system products. Megah Teraju produces all the parts necessary for its products except for one electronic component, which is purchased from three local suppliers: Iman Enterprise, Ihsan Sdn Bhd and Ikhlas Berhad. All suppliers are reliable and seldom cause late delivery. Several activities related to the supply of electronic component along with activity driver have been identified. The following is the information on the Companys activity rates in 2021:

Activity	Cost Per Unit (RM)
Wastage time due to low quality of electronic component	RM 100/re-work unit
Electronic component order	RM 300/order
Order received	RM 150/delivery
Checking order received	RM 200/delivery
Return of electronic component to supplier	RM 50/return
Payment to supplier	RM 250/invoice
Invoice amount dispute	RM 500/dispute

Information on the involvement of customer-related activities by the suppliers for year 2021 is as follows:

	Iman Enterprise	Ihsan Sdn Bhd	Ikhlas Berhad
Wastage time due to low quality of electronic component	20	0	4
Electronic component order	80	96	60
Order received	80	120	76
Checking order received	80	120	76
Return of electronic component to supplier	10	8	30
Payment to supplier	24	96	24
Invoice amount dispute	4	0	26

A purchasing manager with an annual salary of RM100,000 was hired. It is estimated that 60% of his time is used to manage the supply from Ihsan Sdn Bhd and the remaining 40% of his time is used equally to manage the other two suppliers namely Iman Enterprise and Ikhlas Berhad. The costs of purchasing raw materials from each supplier are as follows:

Iman Enterprise	RM 200,000
Ihsan Sdn Bhd	RM 250,000
Ikhlas Berhad	RM 80,000

a) Based on the activities related to the suppliers listed, identify THREE (3) nonvalue added activities and suggest appropriate actions to be taken by Megah Teraju Sdn Bhd.

b) Other than measuring cost of supplier using the supplier performance index as calculated above, there are also other criteria to measure supplier performance. Discuss TWO (2) of these criteria and their respective measures to measure the supplier performance.

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