Answer to Question #105542 in Marketing for sarah

Question

If there is a third supplier R with price-performance 90, on-time delivery 10 out of 12 times, quality performance 5 out of 12 lots rejected, and service performance is 90, what supply volume should ABC order from R? (Assume the best performer gets all demand) *

Answer 1

90

Probability 

Delivery probability

(10/12)

0.8333333

Quality

(5/12)

0.4166667

Total probability

0.83*0.42

0.3486

PV

90 items are equivalent to 34.86%

Total items = 90/34.86*100   =

258.17556

Answer = 258 items to the nearesty whole number