Case 5 - David Lum SCM 406W 4/12/08 Avcon Case 1. Since the...

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David Lum SCM 406W 4/12/08 Avcon Case 1. Since the electronic product is necessary for a wide array of the company’s products, one of the most important factors would be quality. This is because if there is a faulty part then most of the products in the company will be rendered useless to customers. Also there will be a huge lose of customer goodwill and people will question the capability of the product from there on. Thus being able to multi-source this item with respect to that factor will provide a great advantage in not having to rely on one supplier. However, there is also an advantage to single sourcing if the supplier is far superior in quality to the other competitors then the products have a good reputation because of it. It can also be much easier to spot defects since there is less quantity. Cycle time of the product is also an important aspect to look at when deciding whether to use a single source or multiple sources. This is because if the multiple sources can be ordered at different times and be received at different or the same time or there can products arriving constantly. Also many suppliers will help ensure the high volume product never goes out of stock. With a single source though, there is less complication with incoming products. And ordering can be much more predictable since it can be a periodic event. There will only be one cycle time to calculate into the company’s practices. Evaluating the on-time delivery is also a vital factor with multiple sources and single sources. Single source is advantageous because it lowers confusion and if the one source is very dependable then there is no need to rely on multiple ones. Since supply chain is a time critical factor this is one of the
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This note was uploaded on 05/23/2008 for the course SCM 406W taught by Professor Dawnrussell during the Fall '08 term at Pennsylvania State University, University Park.

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Case 5 - David Lum SCM 406W 4/12/08 Avcon Case 1. Since the...

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