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2. Perform various analyses designed to support the supplier evaluation and selection decision. These analyses, with supporting worksheets or templates provided, include Financial Risk
2. Perform various analyses designed to support the supplier evaluation and selection decision. These analyses, with supporting worksheets or templates provided, include Financial Risk Analysis While this case assumes that the cross-functional team visited four suppliers, organizations often perform a preliminary financial risk analysis to identify the suppliers that may not warrant further consideration due to excessive financial risk. Total Cost Analysis Unit price rarely, if ever, equals the total cost of doing business with a supplier. This analysis requires each group to identify relevant additional costs beyond unit price. This involves considering a combination of actual and estimated costs. Consider potential currency issues in your analysis. Supplier Evaluation and Selection Analysis As organizations continue to rely on fewer suppliers, the supplier selection process takes on greater importance. The Supplier Evaluation and Selection Analysis is a robust tool used during supplier assessment. Sourcing Risk Management Plan Sourcing decisions invariably involve risk. This analysis requires each group to (1) identify the potential risks associated with a sourcing decision, (2) assess the possible magnitude of each risk to operations, and (3) identify ways to manage or reduce risk exposure. Single Sourcing: Potential Advantages Single Sourcing: Potential Disadvantages Multiple Sourcing: Potential Advantages Multiple Sourcing: Potential Disadvantages
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