LCC Medical Manufacturing, Inc. LCC Medical Manufacturing located in Punta Gorda, Florida, produces medical devices for orthopedic surgery including replacement parts for human knees, hips, and elbows, and surgical tools. One component LCC outsources is the metal tibial component. This part has a metal stem that is inserted into the tibial lower leg bone. LCC is evaluating three Tier 1 suppliers to manufacture the component part in a certain size. Annual demand for this stockkeeping-unit (SKU) is 20,000 units per year and we assume 250 working days in a year. Other information is shown in Exhibits 13.17 and 13.18. Exhibit 13.17 LCC Medical Manufacturing Economic Outsourcing Information for a Surgical Kit (Tier 1 Price per Price per Price per Managem Transport Order Cost to Store Order Lead Supplier) Unit (P) Unit (P) @ Unit (P) ent Mode Cost Costs One Unit per Time ([) in Q = 5,000 Q = 10,000 Q = 20,000 Oversight (C) per Unit (C.) Year (CA) Days Cost (0) per Unit Xiajing $1.25 $0.95 $0.70 $0.35 $0.25 $655 $0.90 120 MedicUSA $1.70 $1.60 $1.55 $0.15 $0.15 $260 $0.80 90 Werkzeug $1.60 $1.35 $1.30 $0.20 50.20 $350 $0.70 120 Exhibit 13.18 LCC Medical Manufacturing Qualitative Sourcing Criteria for a Surgical Kit Rank Order (1 - worst, 5 - best) Supplier Selection Criteria Xiajing Medic USA Werkzeug Delivery reliability 3 Product quality Single supplier risks (sole sourcing) High Moderate Moderate Product and customs uncertainty (obsolescence, fees, work stoppages, 3 etc. Sustainability practices (green supplier) 2 3 Case Questions for Discussion: 1. What is the total supply chain and logistics cost for each supplier when @ = 5,000, Q = 10,000, and Q = 20,0007 2. What supplier and order quantity do you recommend based on total supply chain costs? 3. Given your total supply chain cost analysis and the qualitative criteria in Exhibit 13.18, using a weighted scoring model of your own design, what are your summary scores for each supplier? (You may decide how to scale each criterion, the weight of each criterion, and whether to include costs or not.) 4. What are your final recommendations