TQM PRINCIPLES $ STRATEGIES

ELENA R.GUDITO

MILA B. LISONDRA

BSBA-2

INSTRUCTOR;

------------------------------------------------------------------------------RATING

Weightages

Qw-Quality

40

Pw-Price

40

Dw-Delivery

20
100

Now we can arrive at composite vendor rating for the vendor using the for the vendor A
discussed in the above examples:
VR= QW X QR+PR+DW X DR
=40 x 0.6+ 40 x 0.8+20x 0.25=61
Thus, composite vendor rating can be arrived at for each lot supplied by a vendor.
Vendor rating for a product is obtained as weighted average of the ratings for the lots
received over a period of time. This may be computed by the following formula:
Average rating= n1 VR1+n2 VR2+n3 VR3+..+Nk VRk
n1 + n2 +..+nk
where,
VR= Vendoring of i lot, and
n1=lot size for i lot
Based on the vendor rating calculated above, each vendor may be classified into three
classes. An example to illustrate the classification is given below:
Rating obtained

class of vendor

90 and above

80 to 90

BELOW 80

EXAMPLE: 9.4

The composite vendor and the lot size of supplies of vendor A in the month of January
2004 is given below: