Supply Chain Management

Supplier Positioning

WWA purchases a variety of products and services to manufactureits product. The table below provides insight into these purchaseson an annual basis:

Category	$ per year spend	$ per item	Comments
Sheet metal	50k	50	Commodity item with multiple suppliers domestic and foreign. Dueto the bulk of this material the company needs sources willing towork on a consignment basis
Final machining services	125k	100	Special equipment is required to perform these services.Additionally, the work is highly complex
Parts machined to WWA drawings	110	105	Small quantities make the parts expensive but there are a lot oflocal and international suppliers capable of manufacturing theparts.
Painting services	20k	15	Painting providers must be qualified by the customer
Consumables (welding rod, hardware, etc)	5k	5	Must meet industry requirements but there are a lot ofsuppliers.

Linear Averaging

The supply chain team has identified 4 suppliers in Low CostRegions and evaluated them on Quality, Price, OTD, andtransportation costs. The price evaluation uses an inverted scale,the lower the score the higher the price. Use Excel perform linearaveraging and select the best supplier. See for the details of eachsupplier and their evaluation.

		Sources of Supply Ratings
Selection Criteria	Weights	Shanghai	Hong Kong	Singapore	Queretaro
Quality	0.40	50	80	90	70
Price	0.35	20	50	70	60
OTD	0.20	90	60	70	90
Transportation Costs	0.05	20	50	80	60
Your procurement team is evaluating suppliers in LCR's (low costregions).
Use Linear Averaging to determine the best supplier (the onewith the highest score)