Explain the concept of total cost of ownership

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Reference no: EM131773560

Your company is under extreme pressure from your biggest customer to reduce prices on a product with lower than desired profit margins. As the OPS Manager you have decided to reach out the Procurement Manager for some help in locating some lower cost sources for your raw stock of acrylic fabric. You have agreed to meet to discuss some important factors that need to be agreed upon prior to reviewing potential sources. In preparation for your meeting complete the following analysis to discuss with the Procurement Manager:

A. There are many factors in selecting an ideal supplier location. Identify the top three for your organization and explain their importance.

B. If your organization were to use the Factor Rating Model to help in the narrowing down potential countries to source from, given your three factors discussed in part a of this question, what weights would you give each factor and why?

C. Explain the concept of Total Cost of Ownership (TCO) and how it would be applied in this scenario.

D. List and provide and explanation for the key aspects of the supplier performance that would mean the most to you as an Operations Manager.

Reference no: EM131773560

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