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Sourcing and Contracts

Chapter 14

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Outline

The Role of Sourcing in a Supply Chain

Supplier Scoring and Assessment

Supplier Selection and Contracts

Design Collaboration

The Procurement Process

Sourcing Planning and Analysis

Making Sourcing Decisions in Practice Summary of Learning Objectives

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The Role of Sourcing in a Supply Chain

Sourcing is the set of business processes required topurchase goods and services

Sourcing processes include: Supplier scoring and assessment

Supplier selection and contract negotiation

Design collaboration

Procurement

Sourcing planning and analysis

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Benefits of Effective Sourcing Decisions

Better economies of scale can be achieved if orders are aggregated Eliminate some suppliers. Keep strategic dual sourcing.

DineEquity Inc., Glendale, CA, parent company ofIHOP and Applebee'srestaurants, is consolidating the vendors the two restaurant chains use --and, in the process, is getting a discount by buying more from the vendors itdoes keep. DineEquity purchased Applebee's in 2007 and found that there

was 75% overlap among IHOP's and Applebee's vendors. More efficient procurement transactions can significantly reduce the overall

cost of purchasing Buying commodities from commodity exchanges / internet sites Firms can achieve a lower purchase price by increasing competition through the use of

auctions

Design collaboration can result in products that are easier to manufactureand distribute, resulting in lower overall costs Ford sends its own engineers to its suppliers

Appropriate supplier contracts can allow for the sharing of risk Buyback contract redistributes the risk of overstocking

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Supplier Scoring and Assessment

Supplier performance should be compared on the basis of the suppliers impact

on total cost

There are several other factors besides purchase price that influence total cost

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Replenishment Lead Time On-Time Performance

Supply Flexibility

Delivery Frequency / Minimum

Lot Size

Supply Quality

Inbound Transportation Cost

Pricing Terms Information Coordination

Capability

Design Collaboration

Capability

Exchange Rates, Taxes, Duties Supplier Viability


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Example of Supplier Assessment

I am currently sourcing out a multi-carrier shipping system for my

company. Since I'll be locked into whatever choice I make for the

next 4-5 years, I want to make sure I choose wisely. Do you have

any comments on the following: Clippership, Pitney Bowes,

NextShip, Logicor, Pfastship, or any others that you may currently

be using? By the way, over 80% of our shipping is small carrier

(UPS, FedEx, USPS), and the remainder is LTL. I am interested in

your comments concerning reliability, tech support, and customer

support. Steve Bachman. April 29, 2006 e-mailed [email protected]

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Example of Transporter Assessments

Hello friends,

My project tile is "Transporter rating system under this project I have to the

parameters for rating [transporters].

- Rahul Gaikwad. April 28, 2007 e-mailed to [email protected]

You can measure transporter performance in the following ways:

1) Cost effectiveness (Affordability)

2) Delivery speed

3) Damage rate (%)

4) Quantity flexibility

5) Time flexibility ( based on your need transport availability)

6)Assurity (how safe & secure your goods is reaching to the destination)- Austin Lowrie. April 29, 2007 e-mailed to [email protected]

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Example: UTD Procurement Department

Bidding requirements as of Nov 14, 2008

UTD is a State of Texas agency and required by state law to bid out orders and giveopportunities to companies and HUBS (Historically Underutilized Business) wheneverpossible. If you have an expensive or technical purchase please contact us at thebeginning of the process if the cost exceeds $10,000.

We can write an RFP (Request for Proposal) and send out a BID for your [UTD personnel]product and service now, allowing you [UTD personnel] to evaluate and discuss theproposals legally with the vendors. As a team we will pick the Best Value solution.

If you do this with out our involvement and then send us a purchase requisition we may have to formally bidout your order, delaying your project. Only a state certified buyer can legally bid on behalf of the University.http://www.utsystem.edu/policy/policies/uts156.html

Federal Funds: http://www.whitehouse.gov/omb/circulars/index-education.html Positiveefforts shall be made by [fund] recipients to utilize small businesses, minority-ownedfirms, and women's business enterprises, whenever possible. Recipients shall, on request,make available for the Federal awarding agency, pre-award review and procurementdocuments, such as request for proposals or invitations for bids, independent costestimates, etc., when any of the following conditions apply. A recipient's procurement procedures or operation fails to comply with the procurement

standards in the Federal awarding agency's implementation of this Circular.

The procurement is expected to exceed the small purchase threshold fixed at 41 U.S.C. 403 (11)(currently $25,000) and is to be awarded without competition or only one bid or offer is receivedin response to a solicitation.

The procurement, which is expected to exceed the small purchase threshold, specifies a "brand

name" product. 8
http://www.utsystem.edu/policy/policies/uts156.htmlhttp://www.utsystem.edu/policy/policies/uts156.htmlhttp://www.whitehouse.gov/omb/circulars/index-education.htmlhttp://www.whitehouse.gov/omb/circulars/index-education.htmlhttp://www.whitehouse.gov/omb/circulars/index-education.htmlhttp://www.whitehouse.gov/omb/circulars/index-education.htmlhttp://www.utsystem.edu/policy/policies/uts156.html



Example: UTD Procurement

All procurement transactions shall be conducted in a manner to provide, to themaximum extent practical, open and free competition.

< $10,000: we can purchase with one or more quotes at Purchasings discretion.

>10,000 and < $25,000: we require at least 3 informal bids, with two HUBHistorically Underutilized Businesses, from the CMBL bidders list run by the Stateof Texas www2.cpa.state.tx.us/cmbl/cmblhub.html

> $25,000: we require formal sealed written bids, including at least 2 HUBvendors, usually posted on http://esbd.cpa.state.tx.us/ unless available under agovernment contract, or a sole source or emergency purchase.

Individual departments can purchase < $500: using a pre-printed SOS small dollar purchase order system form

< $1000: using a UTD Purchasing Master card

> $1000: go to Procurement. Only the UTD Procurement Department can sign contracts, issue Purchase Orders or

conduct formal BIDS. Pricing or quotes for departments are not legal bids and mayhave to be bid out by Procurement. Verbal orders from UTD Departments may be thepersonal obligation of that individual and not the University.

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http://www2.cpa.state.tx.us/cmbl/cmblhub.htmlhttp://www2.cpa.state.tx.us/cmbl/cmblhub.htmlhttp://esbd.cpa.state.tx.us/http://esbd.cpa.state.tx.us/http://esbd.cpa.state.tx.us/http://www2.cpa.state.tx.us/cmbl/cmblhub.html



Example: UTD Procurement Internet Sources

UTD Procurement Management www.utdallas.edu/utdgeneral/business/procure/

The University of Texas System www.utsystem.edu/

Bids over $25,000 posted at the Electronic State Business Dailyhttp://esbd.cpa.state.tx.us/

U.T. System Historically Underutilized Business (HUB) Program www.utsystem.edu/hub/

UT System Policy Library www.utsystem.edu/policy/lib_main.html SBA US Small Business Administration

www.sba.gov/aboutsba/sbaprograms/sdb/index.html

State Law for University Purchasing: An institution of higher education may acquire goodsor services by the method that provides the best value to the institution.

http://tlo2.tlc.state.tx.us/statutes/docs/ED/content/htm/ed.003.00.000051.00.htm#51.9335.00

Texas Procurement and Support Services (TPASS) www.window.state.tx.us/procurement/ Historically Underutilized Business (HUB) www.window.state.tx.us/procurement/prog/hub/

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http://www.utdallas.edu/utdgeneral/business/procure/http://www.utsystem.edu/http://esbd.cpa.state.tx.us/http://esbd.cpa.state.tx.us/http://www.utsystem.edu/hub/http://www.utsystem.edu/policy/lib_main.htmlhttp://www.sba.gov/aboutsba/sbaprograms/sdb/index.htmlhttp://www.window.state.tx.us/procurement/http://www.window.state.tx.us/procurement/http://tlo2.tlc.state.tx.us/statutes/docs/ED/content/htm/ed.003.00.000051.00.htmhttp://tlo2.tlc.state.tx.us/statutes/docs/ED/content/htm/ed.003.00.000051.00.htmhttp://www.window.state.tx.us/procurement/http://www.window.state.tx.us/procurement/prog/hub/http://www.window.state.tx.us/procurement/prog/hub/http://www.window.state.tx.us/procurement/prog/hub/http://www.window.state.tx.us/procurement/http://tlo2.tlc.state.tx.us/statutes/docs/ED/content/htm/ed.003.00.000051.00.htmhttp://tlo2.tlc.state.tx.us/statutes/docs/ED/content/htm/ed.003.00.000051.00.htmhttp://www.window.state.tx.us/procurement/http://tlo2.tlc.state.tx.us/statutes/docs/ED/content/htm/ed.003.00.000051.00.htmhttp://www.sba.gov/aboutsba/sbaprograms/sdb/index.htmlhttp://www.utsystem.edu/policy/lib_main.htmlhttp://www.utsystem.edu/hub/http://esbd.cpa.state.tx.us/http://www.utsystem.edu/http://www.utdallas.edu/utdgeneral/business/procure/



Supplier Selection and Contracts

UTD contract example

Contracts for Product Availability and Supply ChainProfits

Buyback Contracts Revenue-Sharing Contracts

Quantity Flexibility Contracts These contracts coordinate Supply Chains

Contracts to Increase Agent Effort Contracts to Induce Performance Improvement

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Example: UTD Gas Suppliers as of June 26, 2008

After careful review by Procurement Management of the three main companies supplyingscientific gases and services Airgas-Southwest, Matheson Tri-Gas, and Air Liquide, ProcurementManagement has negotiated an agreement using an existing UTSW contract with Airgas-Southwestfor scientific and medical bottled gases as our most advantageous contract. The advantages are: Extremely competitive pricing

Online ordering

Each cylinder will have a tag identifying the ordering person, department, Lab room, and fund number.

Invoices and cylinder inventories can be managed online

Payment can be made by using Procurement cards or invoice

Cylinders can be returned using online system

Lower deliver charges

Faster turnaround on specialty gas orders

Please contact our Airgas-Southwest representative, J??? W???, to set up an account. He can becontacted by email at [email protected], or by phone at 817-7??-7???.

You may still use any of these companies for your requirements; however they are listed in orderof best value to UTD. Airgas-Southwest. Contact: J??? W???. 910 W. Kerney; Mesquite, TX 75149.www.airgas.com

Matheson Tri-Gas. Contact: R?? E????. 2306 N. Beckley Avenue; Dallas, TX 75208.www.mathesontrigas.com

Air Liquide. Contact: M?? D?????. 801 N. West Carrier Parkway; Grand Prairie, TX 75050.www.airliquide.com

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mailto:[email protected]:[email protected]://www.airgas.com/http://www.mathesontrigas.com/http://www.airliquide.com/http://www.airliquide.com/http://www.mathesontrigas.com/http://www.airgas.com/mailto:[email protected]



Sourcing Planning and Analysis

A firm should periodically analyze its procurement spendingand supplier performance and use this analysis as an input forfuture sourcing decisions

Procurement spending should be analyzed by part andsupplier to ensure appropriate economies of scale

Supplier performance analysis should be usedto build a portfolio of suppliers withcomplementary strengths

Cheaper but lower performing suppliers should beused to supply base demand

Higher performing but more expensive suppliersshould be used to buffer against variation indemand and supply from the other source

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Contracts for Product Availability and

Supply Chain Profits

Many shortcomings in supply chain performance occurbecause the buyer and supplier are separate organizations andeach tries to optimize its own profit

Total supply chain profits might therefore be lower than if the

supply chain coordinated actions to have a common objectiveof maximizing total supply chain profits

Recall Chapter 10: double marginalization results insuboptimal order quantity An approach to dealing with this problem is to design a contract that

encourages a buyer (retailer) to purchase more and sell more by increasing the level of product availability and decreasing prices, if necessary

The supplier must share in some of the buyers demanduncertainty

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Contracts

A contract is an agreement between two parties.

Pricing contract types Fixed price

Dependent price Capturable uncertainty

Third party measures, indicators as surrogates

Alterable price Uncapturable uncertainty

Renegotiation necessary

Same classification for quantity contracts

Cost+fee contracts as opposed to price contracts Car repair: Spark plug cost + labor fee.

Sink installation: Drainage assembly + labor at $110/hour for thefirst hour and $80/hour for the

others.

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Contracts Advantages & Disadvantages

Advantages

Uncertainty reduction

Relationship leveraging

Disadvantages for supplier Being blocked from selling to other retailers

Harsh retailers: GM and its suppliers

Disadvantages for retailer Being blocked from buying from other suppliers

Supplier complacency lack of incentives forimprovement

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Contracts to Coordinate Supply Chain

Costs

Differences in costs at the buyer and supplier can lead todecisions that increase total supply chain costs Ex: Replenishment order size placed by the buyer. The buyers EOQ

does not take into account the suppliers costs.

A quantity discount contract may encourage the buyer topurchase a larger quantity (which would be lower costs for thesupplier), which would result in lower total supply chain costs Quantity discounts lead to misleading demand information because of

order batching

A contract is said to be coordinating a supply chain ifthe sumof the profits ofvarious decision makers under the contract isequal to the profit ofone decision maker

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Buyback Contracts

Allows a retailer to return unsold inventory up to aspecified amount at an agreed upon price

Increases the optimal order quantity for the retailer,resulting in higher product availability and higher profits

for both the retailer and the supplier Downsides that buyback contract results in

Surplus inventory for the supplier that must be disposed of, whichincreases supply chain costs

Misleading for the supply chain as it reacts to (inflated) retail orders,

not actual customer demand

Most effective for products with low variable cost, such asmusic, software, books, magazines, and newspapers sothat the supplier can keep the surplus

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Revenue Sharing Contracts

The buyer pays a minimal amount for eachunit purchased from the supplier but shares afraction of the revenue for each unit sold

Decreases the cost per unit charged to theretailer, which effectively decreases the cost ofoverstocking

Misleading for the supply chain as it reacts to(inflated) retail orders, not actual customerdemand

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Quantity Flexibility Contracts

Allows the buyer to modify the order (within limits)as demand visibility increases closer to the point ofsale

Better matching of supply and demand Increased overall supply chain profits if the supplier

has flexible capacity

Lower levels of misleading demand information thaneither buyback contracts or revenue sharingcontracts

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Contracts to Increase Agent Effort

There are many instances in a supply chain where an agent actson the behalf of a principal and the agents actions affect thereward for the principal. Examples of agents include A car dealer who sells the cars of a manufacturer, as well as those of other

manufacturers

A doctor who treats patients for an HMO Sales force working on a commission

For more info, see UTD Medical Management master degree

Examples of contracts to increase agent effort include two-parttariffs and threshold contracts

Threshold contract example: DaimlerChrysler increases the margin for the dealers as the dealers sell

more per month. Dealers shift demand from one month to another.

Threshold contracts increase information distortion.

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Contracts to Induce Performance

Improvement A buyer may want performance improvement from a supplier who

otherwise would have little incentive to do so

A shared savings contract provides the supplier witha fraction of the savings that result from the performanceimprovement

Particularly effective where the benefit from improvement helpsprimarily the buyer, but where the effort for the improvementcomes primarily from the supplier

GM and its suppliers

Department of Defense is moving towards performance based

contracts from cost+fee contracts. Airlines use performance basedcontracts.

USAir engines are owned/repaired by General Dynamics in a certain deliverytime.

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Contracts for Design Collaboration

50-70 percent of spending at a manufacturer is throughprocurement

80 percent of the cost of a purchased part is fixed in the designphase

Design collaboration with suppliers can result in reduced cost,improved quality, and decreased time to market

Important to employ design for logistics, design formanufacturability

Manufacturers must become effective design coordinatorsthroughout the supply chain

Ford designs with its suppliers

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R&D Contracts

Cost Overruns

Military commissions ship and aircraftmanufacturers; see the aside from NYTApril 25, 2008.

Energy companies commission oil fielddevelopment, alternative energyprojects

International Energy Agencyestimates that $1 trillion/yearinvestment necessary in energyinfrastructure until 2030.

These projects have cost and time

overruns:Projects overrun because mostowner and contractor organizationslack a practical and disciplinedapproach to strategic riskmanagement.

- R. Westney, Chairman of Westney Consulting, 2008.

Failing to capture now what can fail later. 24

A manufacturer is commissioned

to build a product after some R&D.


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The Procurement Process

The process in which the supplier sends product in response toorders placed by the buyer

Goal is to enable orders to be placed and delivered onschedule at the lowest possible overall cost

Two main categories of purchased goods: Direct materials: components used to make finished goods

Indirect materials: goods used to support the operations of a firm

Focus for direct materials should be on improving coordinationand visibility with supplier

Focus for indirect materials should be on decreasing thetransaction cost for each order

Procurement for both should consolidate orders wherepossible to take advantage of economies of scale and quantitydiscounts

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Product Categorization by Value

and Criticality (Figure 13.2)

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Critical Items

Ensure availability

Anti-corrosive

coated fasteners

Strategic Items

Ensure long term

relationship

Jet engines

General Items

Ensure low cost

Fasteners

Bulk Purchase

Items

Ensure low cost

Office supplies

Low

Low

High

HighValue/Cost

Criticality


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Impact of SC Contracts on

Profitability: Buyback Contracts Buybacks by publishers

Practice: Custom books are not bought back!

Unsold regular books are returned to the publishers at a lower price than thebookstores initially pay. All the unsold books are returned back to the publisher.

Buyback by TF

Tech Fiber(TF) produces jacket and sells to Ski Adventure(SA) which sells them in themarket. Unsold jackets have no salvage value. Should TF be willing to buy backunsold jackets? Why?

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TF SACost=$5Wholesale

Price=$100~N(1000,3002)

Market

Price=$200


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Impact of SC Contracts on

Profitability: Buyback Contracts Buyback by HP

HP manufactures Pavilion laptops, and sell to its retailer BestBuy. Each Pavilion costs

$500 to produce, wholesales price is $700 and retail price is $1000. When a newer

model is released, HP promises to buy back the left over laptops at $200 and HP can

donate their leftover to charity and gain $50 in tax credit. If a=overage cost ,

b=underage cost for BestBuy, what is (a,b) with and without the contract? (500, 300) with contract

(700, 300) without contract

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Buyback by Panasonic Panasonic sells a DVD player at $120 to BestBuy. BestBuy sells them at $150 to

consumers. Unsold players are sold at discount price of $100 to customers,Panasonic compensates BestBuy for $120-100=$20 per player. Is this a buybackscheme, if so what is the buyback price?

Hint: Can BestBuy sell all the DVD players at the discount price? Answer: No.


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Profits under centralization

)y(c/p-1or)y(c/por}{

yquantityorderOptimal

0)(}{Profits(y)dCoordinateofDerivative

)](}[{Profits(y)dCoordinate

)(yprobabilitonly withitsellcanyou1,byinventoryIncrease:)(Sales(y)ofDerivative

)()()(

)()(),min(Sales(y)

quantityOrder:yprice;market:pprice;wholesale:wcost;:c

*

C

*

C

1*

C

000

0

),min(

00

FFp

cF

cyFp

ycySalesp

yFyF

dDDFdxxFdDdxDf

dDDdxfdDDfDy

yyy

x xD

D

Dy

x

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Separately acting

c/p1

cw:b

implieswhichb}{pbwF

{p}cFhenquantity wdcentralizeordersRetailer

b}{p

bwF(b)yquantityorderoptimalsRetailer'

)yb-w(-)]b}[Sales(y-{p]p[Sales(y))[Sales(y)]-b(y-wyb)|Profit(yRetailer

b))y-(w-(c-]b[Sales(y)cy-)[Sales(y)]-b(ywyy)|Profit(bSupplier

pricebuyback:b

C

11

1*

R

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Split of Supply Chain Profits under the Buyback

Contract

Profit(y)dCentralizec-p

w-p)b|Profit(ysRetailer' C

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Retailer obtains the big portion of the profitswhen the wholesale price is far smaller than the sales price.

c pw

Suppliers portion Retailers portion


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Buyback Contracts: c=$5; p=$200

1165/2001

5120b;105

5/2001

5110b;95

5/2001

5100

c/p1

cw:b CCC

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Wholesale

Price w

Buy

Back

Price b

Optimal

Order size

for SA

Expected

Profit for

SA

Expected

Returns

to TF

Expected

Profit for

TF(suplr)

Expected

Supply

Chain Profi t

$100 $0 1,000 $76,063 120 $90,000 $166,063

$100 $30 1,067 $80,154 156 $91,338 $171,492

$100 $60 1,170 $85,724 223 $91,886 $177,610$100 $95 1,501 $96,875 506 $86,935 $183,810

$110 $78 1,191 $78,074 239 $100,480 $178,555

$110 $105 1,486 $86,938 493 $96,872 $183,810

$120 $96 1,221 $70,508 261 $109,225 $179,733

$120 $116 1,501 $77,500 506 $106,310 $183,810

What happens to the supplier profit with the buyback contract?


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Does a buyback contract increase

profits?

Which of these are true?

Buyback contract increases

the supply chain profit the supplier profit

the retailer profit

the sales to the market

the sales to the retailer

the demand33


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Usual Manufacturer Retailer Supply Chain

34

Manufacturer Manufacturer DC Retail DC

Stores

Variable Production Cost=c=$40

Selling Price=p=$100

Wholesale Price=w=$70

Selling Price=p=$100


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Revenue Sharing (RS) Contracts

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Production Cost=$40

Wholesale Price=wrs

=$50

If the manufacturer reduces wholesale price to wrs,

the retailer can share a percentage of the revenue p.

1-: Revenue sharing portion 50%

Selling Price=$100

Manufacturer Retailer


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Blockbuster Case Study

Demand for a movie newly released video cassette typically starts high anddecreases rapidly Peak demand lasts about 10 weeks

Blockbuster purchases a copy from a studio for $65 and rents for $3 Hence, Blockbuster (retailer) must rent the tape at least 22 times before earning

profit

Retailers cannot justify purchasing enough to cover the peak demand In 1998, 20% of surveyed customers reported that they could not rent the movie they

wanted because the Blockbuster stores did not have that movie.

In 1998, Blockbuster started revenue sharing with the major movie studios In general, the retailer pays the wholesale price wrs.

Studio charges wrs=$8 per copy.

In general, the retailer shares (1-) portion of the sales revenue with the supplier. Blockbuster pays (1-)=30-45% of its rental income.

Even if Blockbuster keeps only half of the rental income, the breakeven point is 6rental per copy

The impact of revenue sharing on Blockbuster was dramatic Rentals increased by 75% in test markets due to higher video availability

Market share increased from 25% to 31% (The 2nd largest retailer, HollywoodEntertainment Corp has 5% market share)36


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Buyback = Revenue Sharing if

Buyback contract: The retailer

pays wfor each unit purchased from the supplier

gets b for each unit unsold to the market

Equivalently,

pays w-b for each unit purchased from the supplier

pays b more for each unit sold to the market

Revenue Sharing:

The retailer

pays wrs for each unit purchased from the supplier

pays (1-)p more for each unit sold to the market

The contracts are the same if

wrs=w-b for each unit purchased from the supplier

(1-)p=bmore for each unit sold to the market37


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If a retailer orders q units,

the manufacturer commits to supplying up to

(1+)q the retailer commits to buying (1-)q Unfortunately the book denotes (1+)q by O

How can quantity flexibility contracts help

increase profitability?

Uncertainty reduction for Retailers by avoiding lack of supply availability

Suppliers by avoiding lack of retailer demand

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Quantity Flexibility Contract

1. Retailer knows the demand distribution F and

makes a forecast q for its order size, typically

q>E(D).

2. Supplier guarantees to supply q(1+ ), >=0.Retailer guarantees to buy q(1- ), 0


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Quantity Flexibility Contract

Without coordination the supplier produces less than with

coordination.

The contract is advantageous to the retailer only ifQ


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41

Wholesalepri ce w

Order

size O

Expected

purchase

by SA

Expected

sale by

SA

Expected

profits

for SA

Expected

profi ts for

TF(supp)

Expected

supply

chain profi t

0.00 0.00 $100 1,000 1,000 880 $76,063 $90,000 $166,063

0.20 0.20 $100 1,050 1,024 968 $91,167 $89,830 $180,997

0.40 0.40 $100 1,070 1,011 994 $97,689 $86,122 $183,8110.00 0.00 $110 962 962 860 $66,252 $96,200 $162,452

0.15 0.15 $110 1,014 1,009 945 $78,153 $99,282 $177,435

0.42 0.42 $110 1,048 1,007 993 $87,932 $95,879 $183,811

0.00 0.00 $120 924 924 838 $56,819 $101,640 $158,459

0.20 0.20 $120 1,000 1,000 955 $70,933 $108,000 $178,9330.50 0.50 $120 1,040 1,003 996 $78,874 $104,803 $183,811

Larger values of and give more flexibility to the retailer.

Supplier prices for this flexibility via the wholesale price w.

ki i i i i


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Making Sourcing Decisions in

Practice

Use multifunction teams

Ensure appropriate coordination across

regions and business units Always evaluate the total cost of ownership

Build long-term relationships with key

suppliers

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Summary of Learning Objectives

What is the role of sourcing in a supply

chain?

What dimensions of supplier performance

affect total cost?

What is the effect of supply contracts on

supplier performance and information

distortion?

What are different categories of purchased

products and services? What is the desired

Documents

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