MRT 102

7816 Words Sep 29th, 2014 32 Pages
Questions 1. What is your recommended sourcing strategy in this case Please support your decision with quantitative and qualitative evidence gathered during the case analysis. Also, present your plan to reduce any risks associated with your sourcing decision. 2. This case provided the data necessary to perform a cursory supplier financial analysis. In reality, cross-functional sourcing teams must often obtain this data during their assessment of potential suppliers. Discuss possible sources of supplier financial information. What may impact a purchasers ability to obtain supplier financial data 3. A sourcing decision of the magnitude highlighted in this case requires a serious commitment of resources and time. Do all sourcing …show more content…
The decision was made to pursue the home computer user, through a strategy focused on shipping low-cost, high-quality computers directly to customers as orders are received (make-to-order). This production model is similar to the Dell approach, and appears to be the model that will dominate the PC industry. Because the company does not plan to build finished PCs (i.e., make-to-stock) in anticipation of future sales, market demand forecasts, supplier quality, supplier capacity, lead time, and delivery reliability are critical factors. The company is willing to carry some units in component inventory as safety stock as a buffer against missing customer order commitments. Pacific Systems Corporation will assemble the computers in its own facilities, but intends to outsource many of the key product components and subassemblies, including the DVD drive, a feature that will be standard on each PCS computer. The decision to outsource the DVD drive resulted from an executive-level insourcing/outsourcing study that concluded the cost to manufacture these drives in-house was highly prohibitive. The product requires production capabilities that are beyond PCSs current expertise. Marketing estimates that first year demand for the new PC, and therefore the DVD drives, would be approximately 500,000 units, with a 20 growth expected for year two. Expected pricing for the computers

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