What are the methods available to the buyer to review the performance of the chosen supplier? What advantage does performance review offer to the buyer?
What will be an ideal response?
The buyer periodically reviews the performance of the chosen supplier(s) using one of three methods. The buyer may contact end users and ask for their evaluations, rate the supplier on several criteria using a weighted-score method, or aggregate the cost of poor performance to come up with adjusted costs of purchase, including price. The performance review may lead the buyer to continue, modify, or end a supplier relationship. Many companies have set up incentive systems to reward purchasing managers for good buying performance, in much the same way sales personnel receive bonuses for good selling performance. These systems lead purchasing managers to increase pressure on sellers for the best terms.
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The reduced gradient values in sensitivity analysis for nonlinear programming models are valid only at the point of the optimal solution
a. True b. False
Sam's hardware store has an order policy of ordering 12 gallons of a specific primer whenever 7 gallons are on hand (unless there's already an ordered delivery due). The store would like to see how well their policy works
Assume that beginning inventory in period 1 is 10 gallons and that orders are placed at the end of the week to be received one week later. (In other words, if an order is placed at the end of week one, it is available at the beginning of week 3.) Assume that if inventory is not on hand, it will result in a lost sale. The weekly demand distribution obtained from past sales is found in the table below. Also, use the random numbers that are provided and simulate 10 weeks' worth of sales. How many sales are lost? Weekly sales Probability 3 .20 4 .30 5 .20 6 .20 Random numbers for sales: 37, 60, 79, 21, 85, 71, 48, 39, 31, 35