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This is a very simple and inexpensive method. However, it is not precise. Its quality heavily depends on the experience and ability of the buyer to judge the situation. As compared to other methods, the degree of subjective judgment is very high as rating is based on personal whim and the vague impressions the buyer. As the quantitative data supported by the profits do not exist, it is not possible to institute any corrective action with the vendor. The rating is done on the basis of memory, and thus it becomes only a routine exercise without any critical analysis. 2. The weighted-point method: The weighted-point method provides the quantitative data for each factor of evaluation. The weights are assigned to each factor of evaluation according to the need of the organization, e.g., a company decides the three factors to be considered quality, price and timely delivery. It assigns the relative weight to each of these factors as under: Quality 50 points Price 30 points Timely delivery 20 points The evaluation of each supplier is made in accordance with the aforesaid factors and weights and the composite weighted-points are ascertained for each suppliers-A, B and C- are rated under this method. First of all the specific rating under each factor will be made and then the consolidation of all the factors will be made for the purpose of judgment. Quality rating: Percentage of quantity accepted among the total quantity is called quality rating. In other words, the quality of the materials is judged on the basis of the degree of acceptance and rejections. For the purpose of comparison, the percentage degree of acceptance will be calculated in relation to the total lots received. Price rating is done on the basis of net price charged by the supplier. Timely delivery rating will be done comparing with the average delivery schedule of the supplier. 3. The cost-ratio plan: Under this method, the vendor rating is done on the basis of various costs incurred for procuring the materials from various suppliers. The cost-ratios are ascertained delivery etc. The cost-ratios are ascertained for the different rating variables such as quality, price, timely delivery etc. The cost-ratio is calculated in percentage on the basis of total individual cost and total value of purchases. At the end, all such cost-ratios will be adjusted with the quoted price per unit. The plus cost-ratio will increase the unit price while the minus cost-ratio will decrease the unit price. The net adjusted unit price will indicate the vendor rating. The vendor with the lowest net adjusted unit price will be the best supplier and so on. Certain quality costs can be inspection cost, cost of defectives, reworking costs and manufacturing losses on rejected items etc. Certain delivery costs can be postage and telegrams, telephones and extra cost for quick delivery etc. ILLUSTRATION 1: The following information is avatlable on 3 vendors: A, B and C. Using the data below, determine the best source of supply under weighed-point method and substantiate your solution. Vendor A: Delivered '56' lots, 3 were rejected, '2' were not according to the schedule. Vendor B: Supplied '38' lots. 2' were rejected, 3' were late. x6 Vendor C: Finished 42' lots, '4' were defective, '5' were delayed deliveries. Give 40 for quality and 30 weightage for service