This table contains the performance criteria and scores (larger numbers are better) for four potential suppliers to Satriale's Pork Store. Evaluate the data and identify the BEST source for Satriale's

Question

Consider the two runners-up to the best source and what points of negotiation might lead them to becoming the optimal supplier.

Performance Dimension Company T Company C Company S Company P
Innovation (W = 0.4) 4 4 2 5
Cost (W = 0.3) 4 3 5 2
Stability (W = 0.2) 2 1 4 5
Speed (W = 0.1) 3 5 5 2
What will be an ideal response?

Answer 1

Answer: Company P has the highest score, 3.8, and would be the supplier of choice
ScoreX =
ScoreT = 0.4 × 4 + 0.3 × 4 + 0.2 × 2 + 0.1 × 3 = 3.5
ScoreC = 0.4 × 4 + 0.3 × 3 + 0.2 × 1 + 0.1 × 5 = 3.2
ScoreS = 0.4 × 2 + 0.3 × 5 + 0.2 × 4 + 0.1 × 5 = 3.6
ScoreP = 0.4 × 5 + 0.3 × 2 + 0.2 × 5 + 0.1 × 2 = 3.8

Company S is two-tenths behind Company P, and has an abysmal innovation score to thank for this position. If the innovation factor is based on new product or service lines, then Satriale's might request that Company S consider exploring new products more aggressively. Company T is only three-tenths behind Company P, and is slightly behind in the Innovation factor but far behind on the Stability factor. An increase of 1 point in the stability score raises the overall score of Company T by two tenths, so whatever Company T can do to become more stable should be considered. Satriale's might take a partnership stance, perhaps increase the frequency of meetings in order to help Company T in the stability arena. A single digit increase in Innovation raises a score by four tenths of a point, but Company T has a high score already in this area. It might be easier to raise an extremely low score (Stability) than squeeze another point higher in an area where they are already performing well.