You are running a small manufacturing company selling a stain glass panes. Your company buys big shipments of stain glass from China and breaks (cuts) these into smaller sized pieces and sells.

Vendor Analysis

Presently you have three vendors supplying the shipments of stained glass. You have established the following items of importance quality, delivery, cost and flexibility. For these you have determined the following importance on a five point scale with 1 being the least important and 5 being the most important.

Table 1: Area Importance

	Importance
Quality	4
Delivery	2
Cost	3
Flexibility	3

The vendors levels of performance vary. The performance of the vendors is given in the following table.

Table 2: Vendor Performance

	Quality	Delivery	Cost	Flexibility
Qingdao	90	40	65	50
Rexi	85	30	70	40
Tian	95	20	75	100

Quality is expressed as a percent non-defective. Delivery is the number of days to obtain the material. Cost is the dollar cost for a one square yard of stained glass. Flexibility reflects how well the company responds to your requests. For instance, Qingdao has 10 percent bad, delivers in 40 days and is about as flexible to your needs as Tian. Qingdao charges 65 dollars for one 3 feet by 3 feet sheet of stained glass.

Based on the vendor performance in table 2, you have placed performance values on the three suppliers. Those values reside in the following table.

Table 3: Value Index Table

		Performance
	Importance	Qingdao	Rexi	Tian
Quality	4	4	1	5
Delivery	2	2	3	5
Cost	3	5	3	1
Flexibility	3	3	2	5

Use the value index to determine the vendor that you will most likely select to deliver your stained glass.

Shipping Sizes / Times

Vendors with a flexibility of 50 or higher have agreed to ship the glass in 8.5 by 11 inches panes. Your company has chosen to receive all glass shipments in that format. In general, you cut these panes into 4.25 by 5.5 inch smaller panes to sell.

The times to cut these panels will be estimated to be the time that the student in class marked and cut the simulated panels. Use those times for your calculations. Assume those cut times and glass cut times will be the same.

Cost of Product

Your cost of material will be your only variable cost. You will hire full time employees working 40 hour weeks at 13 dollars per hour. Your employees will need to deal with customers as well as cut the panes into smaller panes. Use of the 40 hour week for cutting panes and of the week for handling other customer, billing, shipping and marketing activities.

In addition to the fixed cost of your employees, your companys other fixed costs are rent, power, taxes, insurance, marketing, and communications. Without the employees salary, these expenses total to $40,000 per YEAR.

Your company has secured a great price on the glass; however, the shipping and handling have added 75% to this price. Use the loaded price for the price of each panel received.

Revisit your selection based on price and based on yield and compute your cost for each of the three suppliers Qingdao, Rexi, and Tian.