Question

# Fergie Bean, Inc. is considering outsourcing its turtle shell business. They have received bids from four...

Fergie Bean, Inc. is considering outsourcing its turtle shell business. They have received bids from four firms, and CEO Fergie Bean has started to perform an analysis on the scores his operations management team has compiled in the following chart:

 Ratings of Outsource Providers Factor Weight A B C D Labor d 5 4 3 5 Quality procedures 30 2 3 5 1 Logistics system 5 3 4 3 5 Price 25 5 3 4 4 Trustworthiness 5 3 2 3 5 Technology in place 15 2 5 4 4 Management team 15 5 4 2 1

Weights are on scale from 1 to 30 (least to best), and the outsource providers on a scale of 1 to 5 with 5 being the best. The weight for labor is shown as a d because the team could not agree on a weighted value for labor.

a. For what weight of d (if any) is provider C the best choice?

b. Which firm would be the best choice if d is

*5:

*10:

*25:

c. Identify at what d value (if any), B would be the best choice.

Let's Find the weight of values of variable for each alternative

A=weight × preferences

V(A)=.320+5d

V(B)=330+4d

V(C)=370+3d

V(D)=255+5d

For C to be better than other alternatives

370+3d>320+5d

25>d ( d <25)

370+3d>330+4d

40>d(d<40)

370+3d>255+5d

d<57.5

Hence d should be almost 25 for being better than all other alternatives

Best choice of firm

If d=5

V(A)=345, V(B)=350, V(C)=385, V(D)=280

If d=10

V(A)=V(B)=370,V(C)=400 ,V(D)=305

If d=25

V(A)=445, V(B)=430, V(C)=445 ,V(D)=380

For D to be the best choice we need

330+4d>320+5d,

d<10

330+4d>370+3d

d>40

330+4d>255+5d

75>d

Hence no d value exist that make B better than any of these alternatives at one time.

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