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In this case study, you will be working on a supplier ranking problem. It is an actual application for a manufacturing company located in Tijuana, Mexico. Because of confidentiality issues, the data given here have been disguised. The supplier selection criteria and subcriteria have been defined by the Purchasing Manager as shown in Figure 5.12. Note that Flexibility, Process Capability (Cpk Index), and Service have to be maximized, while the other criteria have to be minimized. The company is considering 21 potential suppliers and the supplier data with respect to the criteria are given in Table 5.44.

In this case study, you will be working on a supplier ranking problem. It is an actual application...-1

In this case study, you will be working on a supplier ranking problem. It is an actual application...-2

Questions:

a. Scale the supplier criteria values using linear normalization (simple linearization).

b. Using the scaled values from part (a), apply the L2 metric method to rank the suppliers.

c. Determine the criteria/subcriteria weights using the following methods (use your own judgment):

i. Rating method.

ii. Pairwise comparison of criteria/subcriteria and Borda method.

iii. AHP. Test the consistency of all pairwise comparison matrices.

d. Using the weights obtained in part (c) and the scaled supplier data in part (a), determine the supplier rankings by all three methods.

[NOTE: For AHP, do not perform pairwise comparison of alternatives (suppliers) with each criterion/subcriterion. Instead, use directly the scaled supplier data from part (a) as the S matrix.

e. Compare the supplier rankings obtained by L2 metric, rating method, Borda method, and AHP. Discuss any rank reversals.

 
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Suppose that you observe that the wages for accountants in your town have gone up and that the number of accountants employed has also gone up. Which one of the following conditions could explain this? Illustrate your answer with a graph and explain in a brief paragraph.

a. Businesses are failing, reducing the need for accountants.

b. Many accountants are leaving the field in order to train to become financial analysts instead.

c. A rash of business scandals has increased the demand for auditing services performed by accountants.

d. The local university has just graduated an unusually large group of accountants.

 
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You can access the World Bank’s World Development Indicators database online to download income share data for various countries, and construct Lorenz curves. Choose two countries you are interested in and construct their Lorenz curves on the same graph. Note that the WDI database does not have data for all countries, or for the most recent years. Also, the database provides income shares for the top and bottom 10 percent, in addition to each quintile—include the data points for the top and bottom 10 percent in your graph. Which one of your two countries seems to have a more unequal distribution of income?

 
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For each of the taxes below, indicate whether you think the tax burden will be borne primarily by consumers or producers. Also, how successful do you think each tax will be in raising revenues?

a. A city tax on the use of paper bags in supermarkets. Consumers have the option of asking for plastic bags or bringing their own bags.

b. An increase in the national gasoline tax.

c. A tax on paper copies of textbooks when online versions of the books are available. Discuss why students’ preferences (i.e., whether they are willing to use online texts) are important in determining the effect of the tax.

 
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