A.23 A car manufacturer supplies brake pads from two main suppliers. Historical quality information indicates that for
Question:
• • A.23 A car manufacturer supplies brake pads from two main suppliers. Historical quality information indicates that for Supplier 1, there is a 65% probability that a given lot would contain 3% defects, 25% portability that a given lot would contain 2% defects, and a 10% probability that a given lot would contain 1% defects. As for Supplier 2, there is a 15% probability that a given lot would contain 3% defects, 35% portability that a given lot would contain 2% defects, and a 50% probability that a given lot would contain 1% defects. The cost per pad from supplier 1 is $32 while the cost per pad from supplier 2 is $38.
If the company is about to place an order for 20,000 pads, use decision trees to decide on which supplier to select.
Step by Step Answer:
Operations Management: Sustainability And Supply Chain Management
ISBN: 9780135225899,9780135202722
13th Edition
Authors: Jay Heizer; Barry Render; Chuck Munson