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Delta Electronics is conducting a detailed cost analysis of its two primary suppliers, VoltStream Inc. and CircuitHub Ltd., to evaluate their performance and costs associated
Delta Electronics is conducting a detailed cost analysis of its two primary suppliers, VoltStream Inc. and CircuitHub Ltd., to evaluate their performance and costs associated with the supply of a key electronic component used in their products. Delta Electronics has been sourcing from these suppliers for several years. VoltStream Inc. provides a higher volume of orders at a lower cost per unit, while CircuitHub Ltd. offers a smaller volume at a higher cost per unit. Previous Year's Data: * Delta Electronics purchased 25,000 units from VoltStream Inc and 15,000 units from CircuitHubLtd. * The company places orders with VoltStream Inc. at $10 per unit and with CircuitHub Ltd at $12 per unit. * The ordering cost for both suppliers is $200 per order, and the annual holding cost is $2 per unit. For the most recent year, Delta Electronics has identified the following supplier-related activities and associated costs: Activity 1. Place purchase order 2. Receive & inspect delivery 3. Store inventory 4. Rework product due to poor quality 5. Production downtime due to poor quality 6. Receive and inspect late deliveries Total Cost 1. 150,000 2. 75.000 3. 50,000 4. 100,000 5. 120,000 6. 40,000 Number of Activities 1. 150 orders 2. 300 deliveries 3. 200 Units stores per year 4. 100 units reworked 5. 200 hours downtime 6. 50 late deliveries An analysis revealed last year the following activities related to the two suppliers: Activity: 1. place purchase order 2. Receive & inspect delivery 3. Store Inventory 4. Rework product due to poor quality 5. Production downtime due to poor quality 6. Receive and inspect late deliveries Volt stream inc: 1. 70 orders 2. 120 deliveries 3. 100 units per year 4. 60 units 5. 80 hours 6. 32 late deliveries Circuithub ltd: 1. 45 orders 2. 50 deliveries 3. 30 units per year 4. 10 units 5. 15 hours 6. 12 late deliveries With this information: Calculate the supplier performance index for each supplier and show workings Based on the calculations above, analyse the relative performance of voltstream inc. and circuithub ltd. Discuss any recommended actions for the company, and please explain your reasoning. Assuming delta electronics is considering a shift towards a more agile supply chain mode, from an EOQ (economic order quantity) model to a JIT (just-in-time) system, analyse how this transition would affect the supplier- related costs. Discuss which supplier would be more suitable for this transition and explain why
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