BUS 644 Week 3 Responses
|
Suppliers |
Should a firm attempt to have fewer or more suppliers? What are the advantages and disadvantages of each approach? Your initial post should be 200-250 words.
Guided Response: Respond to at least two of your classmates’ posts in a substantive manner. Some ways could include examples, current events, and/or possible outcomes.
Respond to Lemeshia Spears post
The major advantage of having more suppliers is the fact that it brings about competition between these suppliers. Competition among the suppliers is beneficial to the company seeking supplies because chances are higher of getting better deals, which includes lower prices as the suppliers try to outdo each other (Bohner & Minner 2017). However, having more suppliers has its disadvantages. One of them is the fact that a company with multiple suppliers will buy smaller volumes from different suppliers as compared to buying a considerable supply volume from one supplier. This takes away the economies of scale the company would enjoy if it bought a huge supply volume from one or a few suppliers.
The major advantage of having a single or few suppliers is based on economies of scale. When a company is partnering with one or few suppliers, it gets huge volumes of supplies from these suppliers; therefore, the company can benefit in discounts, tailored service delivery, and the orders from that company are taken seriously by the supplier, on the other hand, has one or few suppliers could be disadvantageous. In case the production chain of the supplier who is being depended on is broken, the company in question could face difficulties trying to find another supplier in a fixed period of time.
Reference
Bohner, C., & Minner, S. (2017). Supplier selection under failure risk, quantity and business volume discounts. Computers & Industrial Engineering, 104, 145-155.
Respond to Peggy Harvey post
Whether it is better for a company to have fewer or more suppliers depends specifically on the individual company and what works best for them. Some benefit from having fewer suppliers and some benefit from having more suppliers. According to our text Operations mangement (2013; sec 5.4) when company’s use many suppliers it allows them to take advantage of the completion among those suppliers depending on which one performs and provides the best. The text also references having only a few suppliers or even one supplier , and how these partnerships encourage closer relationships among the two.
As we know there are always disadvantages to consider when making business choices and interactions. When considering using several suppliers company’s would have to be concerned with not being able to fulfill the requirements needed by so many suppliers. For instance each supplier may have require that they provide a specific amount of services for the company per month. Depending on how business flow is, the company may have difficulties meeting such demands. However the likely disadvantage to using a fewer number of suppliers is the limits that are placed on the company in reference to their available options in the event that their suppliers cannot meet the company demand. Company’s would better benefit for having back up options for suppliers to ensure that they can always meet the demand of their consumers.
References:
Vonderembse, M. A., & White, G. P. (2013). Operations management [Electronic version]. Retrieved from https://content.ashford.edu/
|
Forecasting Methods |
Read Problem 6 in Chapter 6 of your textbook. Calculate and answer parts a through d. Include all calculations and spreadsheets in your post. Explain why the moving average method was used instead of another forecasting method. What might be another forecasting method that could prove to be just as useful? Your initial post should be 200-250 words.
Guided Response: Respond to at least two of your classmates’ posts to identify some of their recommended forecasting methods. Give additional advice and alternative solutions that might be used as well.
Respond to Peter Sawyer post
Below shows the number of mergers by year that took place in the Savings and Loan industry from 2001-2011
|
Year |
Mergers |
Year |
Mergers |
|
2000 |
46 |
2006 |
83 |
|
2001 |
46 |
2007 |
123 |
|
2002 |
62 |
2008 |
97 |
|
2003 |
45 |
2009 |
186 |
|
2004 |
64 |
2010 |
225 |
|
2005 |
61 |
2011 |
240 |
The calculation below shows a 5-year moving average that will forecast the number of mergers in 2012
Ƒ2012 = (123+97+186+225+240)/5 = 174.2
The calculation below determines the forecast for 2005 – 2011.
Ƒ2005 = (64+45+62+46+46)/5 = 52.6
Ƒ2006 = (61+64+45+62+46)/5 = 55.6
Ƒ2007 = (83+61+64+45+62)/5 = 63
Ƒ2008 = (123+83+61+64+45)/5 = 75.2
Ƒ2009 = (97+123+83+61+64)/5 = 85.6
Ƒ2010 = (186+97+123+83+61)/5 = 110
Ƒ2011 = (225+186+97+123+83)/5 = 142.8
Year Actual Forecasted Error Squared
2005 61 52.6 8.4 70.56
2006 83 55.6 27.4 750.76
2007 123 63 60 3,600
2008 97 75.2 21.8 475.24
2009 186 85.6 100.4 10,080.16
2010 225 110 115 13,225
2011 240 142.8 97.2 9,447.84
Total 430.2 37,649.56
MSE = 37,649.56 / 7 = 5,378.51
MAD = 430.2 / 7 = 61.46
The below calculation shows a 5-year weighted average that forecasts the number of mergers for 2012
Ƒ2012 = (.30)240+ (.25)225+ (.20)186+ (.15)97+ (.10)123
= 72+56.25+37.2+14.55+12.3 = 192.3
Below regression analysis was used to forecast the number of mergers in 2012
Year Coded Value Mergers XY X2 Y2
for Year
2000 1 46 46 1 2,116
2001 2 46 92 4 8,464
2002 3 62 186 9 3,844
2003 4 45 180 16 2,025
2004 5 64 320 25 4,096
2005 6 61 366 36 3,721
2006 7 83 581 49 6,889
2007 8 123 984 64 15,129
2008 9 97 873 81 9,409
2009 10 186 1,860 100 34,596
2010 11 225 2,475 121 50,625
2011 12 240 2,880 144 57,600
SUM 78 1,278 10,843 650 198,514
Ƅ = 12(10,843) – 78(1,278) / 12(650) - 782
= 130,116 – 99,684 / 7,800 – 6,084
= 30,432 / 1,716
= 17.73
a = 1,278/12 – 17.73(78)/12
= 106.5 – 115.25
= -8.75
r = 12(10,843) – 78(1,278) / √{12(650)-782}{12(198,514)-1,2782}
= 130,116-99,684/√{7,800-6,084}{2,382,168-1,633,248}
= 130,116-99,684/√(1,716)(748,920)
= 30,432/√1,285,146,720
= 30,432/35,848.94
= 0.85
The moving average method was used due to the ease of calculating data from a number of sources. It can take specific timelines and have a more even and precise prediction on numbers.
References
Vonderembse, M. A., & White, G. P. (2013). Operations management [Electronic version]. Retrieved from https://content.ashford.edu/
Respond Maria Harosullivan post
Explain why the moving average method was used instead of another forecasting method.
The number of merger data has large peaks and valleys. The use of moving average method is used to smooth out the most recent period to project the next time period, Vonderembse, M. A., & White, G. P. (2013).
What might be another forecasting method that could prove to be just as useful?
According to Vonderembse there are of forecast methods for a firm to choose. A forecast is a prediction of the future, Vonderembse, M. A., & White, G. P. (2013). Regression analysis is another method to forecast both time-service and cross-sectional data.
The figures below indicate the number of mergers that took place in the savings and loan industry over a 12-year period.
|
Year |
Mergers |
Year |
Mergers |
|
2000 |
46 |
2006 |
83 |
|
2001 |
46 |
2007 |
123 |
|
2002 |
62 |
2008 |
97 |
|
2003 |
45 |
2009 |
186 |
|
2004 |
64 |
2010 |
225 |
|
2005 |
61 |
2011 |
240 |
2012. Calculate a 5-year moving average to forecast the number of mergers for 2012.
Moving Average forecasting formula
Ƒ2012 = (123+97+186+225+240)/5 = 174.2
2011. Use the moving average technique to determine the forecast for 2005 to 2011. Calculate measurement error using MSE and MAD.
Ƒ2005 = (46+46+62+45+64)/5 = 52.6
Ƒ 2006 = (46+62+45+64+61)/5 = 55.6
Ƒ 2007 = (62+45+64+61+83)/5 = 63.0
Ƒ 2008 = (45+64+61+83+123)/5 = 75.2
Ƒ 2009 = (64+61+83+123+97)/5 = 85.6
Ƒ 2010 = (61+83+123+97+186)/5 = 110.0
Ƒ 2011 = (83+123+97+186+225)/5 = 142.8
Year Moving Average Actual Error Squared Error
|
2005 |
52.6 |
61 |
61-52.6=8.4 |
(8.4)2=70.56 |
|
2006 |
55.6 |
83 |
83-55.6=27.4 |
(27.4)2=750.76 |
|
2007 |
63 |
123 |
123-63=60 |
(60)2=3,600 |
|
2008 |
75.2 |
97 |
97-75.2=21.8 |
(21.8)2=475.24 |
|
2009 |
85.6 |
186 |
186-85.6=100.4 |
(100.4)2=10,080.16 |
|
2010 |
110 |
225 |
225-110=115 |
(115)2=13,225 |
|
2011 |
142.8 |
240 |
240-142.8=97.2 |
(97.2)2=9,447.84 |
|
Total |
|
|
430.2 |
37,649.56 |
MSE = 37,649.56/7 = 5,378.51
MAD = 430.2/7 = 61.46
2012. Calculate a 5year weighted moving average to forecast the number of mergers for 2012. Use weights of 0.10, 0.15, 0.20, 0.25, and 0.30,with the most recent year weighted being the largest.
0.10(123)+0.15(97)+0.20(186)+0.25(225)+0.30(240) = 192.3
2012. Use regression analysis to forecast the number of mergers in 2012.
|
Year |
Coded Value for Year (X) |
Mergers (Y) |
XY |
X2 |
Y2 |
|
2000 |
1 |
46 |
46 |
1 |
2,116 |
|
2001 |
2 |
46 |
92 |
4 |
2,116 |
|
2002 |
3 |
62 |
186 |
9 |
3,844 |
|
2003 |
4 |
45 |
180 |
16 |
2,025 |
|
2004 |
5 |
64 |
320 |
25 |
4,096 |
|
2005 |
6 |
61 |
366 |
36 |
3,721 |
|
2006 |
7 |
83 |
581 |
49 |
6,889 |
|
2007 |
8 |
123 |
984 |
64 |
15,129 |
|
2008 |
9 |
97 |
873 |
81 |
9,409 |
|
2009 |
10 |
186 |
1,860 |
100 |
34,596 |
|
2010 |
11 |
225 |
2,475 |
121 |
50,625 |
|
2011 |
12 |
240 |
2,880 |
144 |
57,600 |
|
Total |
78 |
1,278 |
10,843 |
650 |
192,166 |
b = 12 (10,843) – 78 (1,278) / 12 (650) – 782
b= 130,116 – 99,684 / 7,800 – 6.084
b= 30,432/1,716
b= 17.73
a= 1,278 - 17.73(78)
12 12
a= 106.5 – 115.25
a=-8.75
Ye= -8.75 + 17.73 (13)
Ye= 221.74
Thus, the projection of mergers is 221.7
Reference
Vonderembse, M. A., & White, G. P. (2013). Operations management [Electronic version]. Retrieved from https://content.ashford.edu/