Engr.Alaa Sultan how to select a seller.

1) The best way to select Seller without price option.

Seller A probability P=60% and Confidence level C= 75%.

Calculate A (PxC)= 45%.

Seller B P=65% and C= 70%.
Calculate B (P×C)=45.5%.
Seller B (P×C)> Seller A (P×C).

Therefore Select B.
Example:-
Seller A may provides the materials at time with probability 60% and confidence level 55%.
Seller B may provides the materials at time with probability 40% and confidence level 90%. You
will select -----------------.
A) select B because the confidence higher than A.
B) Select A because the probability higher than B.
C) Data insufficient.
D) Select B because the selection based one cumulative value of probability and confidence
level.
Answer D.
0.6×0.55 <0.4X0.9 select seller B.
2) The best way to select Seller with price option.
Seller A may provides the materials at time with probability 60%, confidence level 75% and
total price 550,000. Seller B may provides the materials at time with probability 65 % ,
confidence level 60% and total price 600,000 Who will be selected if the confidence level of
Seller B increased by 10%?.
A) Select A because the selection based one cumulative value of probability, confidence level
and price.
B) Select A because the probability higher than B.
C) Data insufficient.
D) Select B because the selection based one cumulative value of probability, confidence level
and price.
The best method:-
Seller A =(1 – (PxC))x(price) =(1- (0.6x0.75))x(550000) = 302500.
Seller B =(1 – (PxC))x(price) = (1- ( 0.65x0.7))x (600000) = 327000
Select the least price . Select seller A.

***** We can not use EMV because the price not impact to multiply by probability.

Example 2:-

Seller A may provides the materials at time with probability 60%, confidence level 55% and
total price 550,000. Seller B may provides the materials at time with probability 40% ,
confidence level 90% and total price 860,000. You will select -----------------.

A) Select A because the selection based one cumulative value of probability, confidence level
and price.
B) Select A because the probability higher than B.
C) Data insufficient.

D) Select B because the selection based one cumulative value of probability, confidence level
and price.
The best Method
Seller A = ( 1 – (pxc))×550000 =(1-(0.6×0.55))×550000= 368500.
Seller B =( 1 – (pxc))×860000 =(1-(0.4×0.90))×860000= 550400.

Price of A <B select the least price.

Select A.