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Suppliers are important people in any business or organization since they provide certain services and products that run the businesses. There are several factors that affect the selection of suppliers of particular products and services in a business. Moreover, these factors are also used in the evaluation of the performance of current suppliers, so as to reduce costs and mitigate risks that might be involved. These factors are usually weighed by the management of any businesses so as to be able to select the most suitable suppliers. Quality, warranty length, and cost are the common factors that are usually weighed for the selection of the most suitable suppliers.
Quality is the majorly considered attribute in evaluating suppliers. It generally refers to the quality of goods and services that the suppliers supply to the businesses. Businesses usually weigh the quality of the supply from different suppliers, whereby the best supplier is the one whose goods and services meet the degree of expectations of the customers in the business. In this supplier evaluation, the attribute of quality is considered to weigh 45% of the evaluation. Supplier C is observed to have the best record of quality followed by A and B.
Warranty length is another trait that many businesses consider in the evaluation of suppliers. Primarily, a warranty length refers to the period in which the supplier offers to repair or replace goods and services that they offer to a business in case of any defect, at totally no costs. This attribute, therefore, assures businesses that the suppliers will repay the goods and services they offer if they supply they receive will be defected or will be unpleasant to them. Furthermore, this factor of the warranty can be used to solve disputes and make evaluations between the businesses and the suppliers. In our evaluation, this attribute is weighed to be 30% important. Supplier B offers the longest warranty length of five years, followed by supplier A and C, at three years and two years respectively.
Lastly, the cost is another consideration for supplier evaluation. In our evaluation, it is considered to have a relative weight of 25%. This attribute mainly looks at the prices of goods and services offered by different suppliers. Many businesses would prefer to have a large number of goods and services sold to them at a cheaper price. The cost of goods and services also plays a vital role in the profits to be made by the businesses. Many businesses would go for the cheaper suppliers regardless of the quality and the warranty offered by the same supplier. In our evaluation, the subassemblies from supplier C are the cheapest at $6500, while the other suppliers sell at $7500. Therefore, a good supplier evaluation should not only weigh its evaluation in one factor but to several factors where analyses should be done to conclude the best supplier of goods and services to a business.
In conclusion, I would recommend suppliers B and C following the analysis was done on the spreadsheet. For instance, supplier B is the best with an average score of 27% followed by Supplier C with 21.5%. Having considered all the factors above, supplier A obtained 20% hence should be eliminated. The manager should, therefore, continue with suppliers B and C.
Monczka, Robert M., et al. Purchasing and supply chain management. Cengage Learning, 2015.
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