P15.

34
1
Activity/ Suppliers A B C D Total
Material Purchased 60,000 120,000 70,000 30,000 280,000
60,000 120,000 70,000 30,000
Supplier activity cost
Order Material 4,000 10000 6000 2000 22,000
Receive Order 30,000 120000 15000 30000 195,000
Inspect Order 1,250 6250 1250 - 8,750
Return Material to Sup 630 1680 - - 2310
Downtime due to late Deli 5200 15600 2600 2600 26000
Rework due to low quality 550 500 - - 1050
Pay suppliers 2280 9120 2280 1900 15580
Dispute Invoiced amount 960 - 6240 960 8160
Manag Salary 9,000 13,500 9,000 4,500 36,000
Total SAC 53,870 176650 42370 41960
Total cost of ownership 113,870 296,650 112,370 71,960
Supplier performance index 0.8978 1.4721 0.6053 1.3987

2. Discuss the relative performance of each supplier

Supplier C is demonstrated to be the most cost-effective supplier than any other supplierspresented in the table. Supplier C
on a supplier performance index of 0.60529.Supplier B is seen to be the least cost-effective supplier than all other supplie
Supplier Bstands on a supplier performance index of 1.47208. As a supplier, Supplier B should considerimplementing better qu
products to decrease the cost of rework on low quality of tiles.Also, for late deliveries, supplier B may consider implementing
processes that woulddecrease individual orders and decrease late delivery. Usual deliveries should be delivered within a short
timeframe to have customer satisfaction. If these implementation are unsuitable, Fabulous should consider directing orders to
Supplier C instead.

Three non-financial performance measures that could be used to assess the performance of the tile suppliers is quality, cost a
relationship. Quality can be measured by understanding the percentage of orders being rejected. This is where suppliers can in
quality of products and minimise any financial penalties due to defective products. Also, the cost, where suppliers are able to
cost-down targets. This is where the suppliers are expected to reduce the price each year by a percentage for buying organisa
Lastly, byunderstanding customer and supplier relationship it can increase quality and having a better connection to each othe
to be able to receive feedback that can increase better supply chain management.
 esented in the table. Supplier C stands
ctive supplier than all other suppliers.
d considerimplementing better quality
ier B may consider implementing new
should be delivered within a short
should consider directing orders to only

the tile suppliers is quality, cost and

cted. This is where suppliers can inspect
cost, where suppliers are able to meet the
y a percentage for buying organisations.
g a better connection to each other. Also,
P15.35:
1
EOQ = √((2 * D * S) / H) = 600
2
Total annual cost = 2400
3
Number of order = D/EOQ = 8
4
a, Calculate the new EOQ for XL-20
EOQ = √((2 * D * S) / H) = 120

b, Number of order = 4800/120 40