PROCUREMENT FUNCTION : EXERCISES

EXERCISE 1:
As a procurement manager, you have identified 4 potential suppliers to buy an
equipment and have gathered these information:

Provider Price Quality Warranty After sale Delivery Payment

(M $) service time terms

A 15 Very 3 years Excellent 6 months 6 months

good
B 14 Good 2 years good 3 months 90 days
C 14 Medium 30 months Medium 1 month At the
delivery
D 13 Medium 1 year Bad 2 months 1 month

The weighting coefficients (WC) are as follows:

Criteria Coefficient
Quality 6
Delivery time 2
Warranty 4
Payment terms 1
After sale service 5

Which provider will you recommend to the CEO ? Justify your answer. (Use a four point
scale to determine the grades related to each provider.
Correction:

Convert the information into grades

Provider Price Quality Warranty After sale Delivery Payment

(M $) (6) (4) service time terms
(5) (2) (1)
A 15 4 4 4 1 4
B 14 3 2 3 2 3
C 14 2 3 2 4 1
D 13 2 1 1 3 2
The best provider is the one with the lowest weighted average price :

Weighted Average Price = Price / Total Divider

Total Divider = 1 + ∑ Ni X WC/100

Provider Price Quality Warranty After Delivery Payment Total Weighted

(M (6) (4) sale time terms divider average
$) service (2) (1) price
(5)
A 15 24 16 20 2 4 1.66 9.04
B 14 18 8 15 4 3 1.48 9.46
C 14 12 12 10 8 1 1.43 9.79
D 13 12 4 5 6 2 1.29 10.08

The best provider is the one with the lowest weighted average price : Provider A

EXERCISE 2 :
A procurement manager has identified 5 potential suppliers for a product P and has
gathered these information:

Provider Price Quality Provider’s Delivery Payment

($) reputation time terms
ROSE CIE 250 3nd Very good 1 week 6 months
FARHAT 240 4th Good 3 days 60 days
BROTHERS
SBT 247 2nd Bad 1 month At the
delivery
INTERLIAIS 230 5th Medium 2 weeks 1 month
ON
TRIKI & 270 1st Excellent 3 weeks 3 months
FEKI

The weighting coefficients are as follows:

 Criteria Coefficient
Quality 4
Delivery time 1
Payment terms 2
Provider’s reputation 3

Which provider will you recommend ? Justify your answer. (Use a five point scale to
determine the grades related to each provider).

Correction :

Provider Quality Provider’s Delivery Payment

reputation time terms
ROSE CIE 3 4 4 5
FARHAT 2 3 5 3
BROTHERS
SBT 4 1 1 1
INTERLIAISO 1 2 3 2
N
TRIKI & FEKI 5 5 2 4

Provider Price Quality Provider’s Delivery Payment Total Weighted

(4) reputation time terms divider average
(3) (1) (2) Price
ROSE CIE 12 12 4 10 1.38 181.16
250
FARHAT 240 8 9 5 6 1.28 187.5
BROTHERS
SBT 247 16 3 1 2 1.22 202.46
INTERLIAISO 230 4 6 3 4 1.17 196.58
N
TRIKI & FEKI 270 20 15 2 8 1.45 186.21

The best provider is the one with the lowest weighted average price : Provider ROSE CIE