Hello, I am taking operation management class, and I needed help on my assignmen

Question

Hello, I am taking operation management class, and I needed help on my assignment.

Your company is under extreme pressure from your biggest customer to reduce prices on a product with lower than desired profit margins. As the Operations Manager, you have decided to reach out the Procurement Manager for some help in locating some lower cost sources for your raw stock of acrylic fabric. You have agreed to meet to discuss some important factors that need to be agreed upon prior to reviewing potential sources. In preparation for your meeting complete the following analysis to discuss with the Procurement Manager:

A. There are many factors in selecting an ideal supplier location. Identify the top three for your organization and explain their importance.

B. Explain the concept of Total Cost of Ownership (TCO) and how it would be applied in this scenario.

C. List and provide and explanation for the key aspects of the supplier performance that would mean the most to you as an Operations Manager.

Explanation / Answer

Case Situations:

A) The top factors in selecting an ideal supplier are:

B) The total cost of ownership is an evaluation of all the costs associated with the supply of raw material. Activities that incur cost include buying, transporting or storage. Costs could be direct and indirect costs. TCO concept is used to evaluate suppliers holistically to arrive at best alternative i.e. most cost-effective. In this scenario the following costs would form total cost of ownership:

C) The key aspects of the supplier performance that would mean the most to me as an Operations Manager:

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