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Procurement Analysis and Recommendations

The document describes two procurement exercises. In the first exercise, the procurement manager identifies 4 potential suppliers for an equipment purchase. After gathering key information and assigning grades on a scale, the manager calculates the weighted average price for each supplier. Supplier A has the lowest weighted average price of $9.04 million and is recommended. In the second exercise, 5 potential suppliers for another product are identified. Again after gathering information, assigning grades, and calculating weighted average prices, Supplier ROSE CIE has the lowest price of $181.16 and is recommended to the CEO.

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souad mhiri
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44 views3 pages

Procurement Analysis and Recommendations

The document describes two procurement exercises. In the first exercise, the procurement manager identifies 4 potential suppliers for an equipment purchase. After gathering key information and assigning grades on a scale, the manager calculates the weighted average price for each supplier. Supplier A has the lowest weighted average price of $9.04 million and is recommended. In the second exercise, 5 potential suppliers for another product are identified. Again after gathering information, assigning grades, and calculating weighted average prices, Supplier ROSE CIE has the lowest price of $181.16 and is recommended to the CEO.

Uploaded by

souad mhiri
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

PROCUREMENT FUNCTION : EXERCISES

EXERCISE 1:
As a procurement manager, you have identified 4 potential suppliers to buy an
equipment and have gathered these information:

Provider Price Quality Warranty After sale Delivery Payment


(M $) service time terms

A 15 Very 3 years Excellent 6 months 6 months


good
B 14 Good 2 years good 3 months 90 days
C 14 Medium 30 months Medium 1 month At the
delivery
D 13 Medium 1 year Bad 2 months 1 month

The weighting coefficients (WC) are as follows:


Criteria Coefficient
Quality 6
Delivery time 2
Warranty 4
Payment terms 1
After sale service 5

Which provider will you recommend to the CEO ? Justify your answer. (Use a four point
scale to determine the grades related to each provider.
Correction:

Convert the information into grades

Provider Price Quality Warranty After sale Delivery Payment


(M $) (6) (4) service time terms
(5) (2) (1)
A 15 4 4 4 1 4
B 14 3 2 3 2 3
C 14 2 3 2 4 1
D 13 2 1 1 3 2
The best provider is the one with the lowest weighted average price :

Weighted Average Price = Price / Total Divider

Total Divider = 1 + ∑ Ni X WC/100

Provider Price Quality Warranty After Delivery Payment Total Weighted


(M (6) (4) sale time terms divider average
$) service (2) (1) price
(5)
A 15 24 16 20 2 4 1.66 9.04
B 14 18 8 15 4 3 1.48 9.46
C 14 12 12 10 8 1 1.43 9.79
D 13 12 4 5 6 2 1.29 10.08

The best provider is the one with the lowest weighted average price : Provider A

EXERCISE 2 :
A procurement manager has identified 5 potential suppliers for a product P and has
gathered these information:

Provider Price Quality Provider’s Delivery Payment


($) reputation time terms
ROSE CIE 250 3nd Very good 1 week 6 months
FARHAT 240 4th Good 3 days 60 days
BROTHERS
SBT 247 2nd Bad 1 month At the
delivery
INTERLIAIS 230 5th Medium 2 weeks 1 month
ON
TRIKI & 270 1st Excellent 3 weeks 3 months
FEKI

The weighting coefficients are as follows:


Criteria Coefficient
Quality 4
Delivery time 1
Payment terms 2
Provider’s reputation 3

Which provider will you recommend ? Justify your answer. (Use a five point scale to
determine the grades related to each provider).

Correction :

Provider Quality Provider’s Delivery Payment


reputation time terms
ROSE CIE 3 4 4 5
FARHAT 2 3 5 3
BROTHERS
SBT 4 1 1 1
INTERLIAISO 1 2 3 2
N
TRIKI & FEKI 5 5 2 4

Provider Price Quality Provider’s Delivery Payment Total Weighted


(4) reputation time terms divider average
(3) (1) (2) Price
ROSE CIE 12 12 4 10 1.38 181.16
250
FARHAT 240 8 9 5 6 1.28 187.5
BROTHERS
SBT 247 16 3 1 2 1.22 202.46
INTERLIAISO 230 4 6 3 4 1.17 196.58
N
TRIKI & FEKI 270 20 15 2 8 1.45 186.21

The best provider is the one with the lowest weighted average price : Provider ROSE CIE

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