Please Read “8.8 End-of-Chapter Case: Supplier Selection for the Jeep Wrangler

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Please Read “8.8 End-of-Chapter Case:
Supplier Selection for the Jeep Wrangler Cobra
” and answer the questions at the end of the case.
I have provided the case below and there is only 1 question that needs to be answered.
I have provided a resources in files to help with if needed
No outside resources are to be used!
Only what I have provided.
Please write from your point of view as if you are the one speaking.
Make sure question is clearly and thoughtfully answered. That is why I have put two pages for only 1 question being answered at the bottom of the case anylisis. You do not necessarily need to use up the two pages, but they are there if needed to write more for answer.
These assignments are worth 40% of my grade, so please consider that when writing.
Thank you
8.8End-of-Topic Case: Supplier Selection for the Jeep Wrangler Cobra
The Jeep Wrangler is one of Fiat-Chrysler Automobiles’ (FCA) most popular products. Built at Toledo Supplier Park in Toledo, Ohio, the Jeep Wrangler is a true American icon. This vehicle is desired in markets all over the world. FCA occasionally develops limited edition “buzz models” with unique paint, seating, trim packages, and wheels. A new “buzz model” is being developed for the Chinese market, named the Wrangler Cobra Edition.
Your responsibility is to act as the “Team Lead” to select the supplier that will manufacture the wheels for the Wrangler Cobra. Marketing assumes FCA can sell 5,000 Wrangler Cobras, but actual demand could be higher or lower, depending on how “hot” (or not) the Cobra turns out to be.
Status and Constraints
Branding: All FCA vehicles in China are “premium” brands. Customers expect best quality from “imported” vehicles.
Per Part Cost: This is the cost of one wheel and includes raw material costs, labor, manufacturing, and overhead.
Tooling Cost: FCA purchases and owns the tooling that the supplier uses to mold the wheels.
Tooling Lead Time: As the lead times to produce these wheels differ with each supplier, it’s important to understand how long the supplier needs to prepare their facility and equipment for production. The tooling lead time is defined as the number of weeks from Source (supplier) Selection until the start of wheel production at the supplier’s manufacturing facility.
Capacity: Suppliers have limited capacity in their facilities. In this case, all suppliers are capable of producing the wheel. However, some suppliers have more capacity than others for this low-volume activity.
Manufacturing Time: The manufacturing time is defined as the amount of time in between tooling lead time and transportation lead time. For the purposes of this study, all suppliers have quoted a manufacturing time of 1 week.
Quality: As the customers for the Wrangler Cobra edition are paying a premium price for the vehicle as compared to others in its segment, the customers expect a premium quality vehicle in all aspects. FCA Supplier Quality categorizes quality performance into “Green” (above average), “Yellow” (average), and “Red” (below average) segments.
Transportation Costs: Transportation costs have been provided on a per wheel basis, and should be considered as part of total pricing analysis.
Transportation Lead Time: Transportation of the goods includes the time the wheels leave the manufacturing facility until the time they arrive at the assembly plant, and is provided in weeks unless otherwise stated.
Supplier Profiles
Dragon Wheel & Tire (DWT), located in Shanghai, China, is the current production supplier of the Jeep Wrangler (non-Cobra edition). As this supplier is familiar with shipping wheels to Toledo Supplier Park, transition hiccups are expected to be minimal. Quality has been an issue in the past, but FCA’s Supplier Quality department has indicated the current rating is “Yellow.” DWT does not make their own wheel molds in-house, so they require a lead time of 15 weeks to order the wheel molds from an outside source. The outside mold shop has quoted $50,000 for tooling. Transportation of the finished wheels from the manufacturing plant to Toledo has been quoted at 4 weeks. The piece price per wheel is $65.00/wheel. DWT has indicated that they have very little open capacity and would require overtime to support this added production. For any wheel volume equivalent of vehicles over 5,000, DWT will charge a $2/wheel premium. Transportation costs have been provided at $6/wheel.
Wally’s Worldwide Wheels is located in Perrysburg, Ohio, about 20 minutes away from Toledo Supplier Park. Wally’s is a current supplier to the FCA Town & Country Minivan, which is assembled in Windsor, Ontario, and is familiar with FCA requirements. Wally’s is known throughout the industry as a very high quality supplier, and FCA Supplier Quality has indicated the current rating is “Green.” Wally’s does not make their own wheel molds in-house, so they require a lead time of 18 weeks to order the wheel molds from an outside source. Transportation of finished wheels from Perrysburg to Toledo has been quoted at 1 day. The outside mold shop has quoted $70,000 for tooling, and can support up to a 20% increase in volume at no cost to FCA. The piece price per wheel is $70.00/wheel. Transportation costs have been provided at $2/wheel.
Ruota is located in Turin, Italy, and supports current Fiat low-volume Maserati and Ferrari brand vehicles. Ruota specializes in low-volume activity and has its own wheel mold shop in-house. This allows for a lead time of 8 weeks from source selection to product build, and a $20,000 tooling cost. Transportation of finished wheels from Turin to Toledo has been quoted at 4 weeks. Quality reports from Ferrari and Maserati programs look encouraging, but Ruota’s performance on a new product for the Wrangler is unknown. The price is $75/wheel. As Ruota is very interested in acquiring more business in the U.S. market, the company has offered to provide shipping to Toledo Supplier Park at no cost to FCA. Ruota has not traditionally supported a high volume of wheels and only has the capacity to support the wheel equivalent of 8,000 total vehicles.
Carnival Wheel is located in São Paulo, Brazil, and is a new supplier looking to increase business with FCA. Quality is unknown, but an initial analysis looks promising. Carnival Wheels does not make its wheel molds in-house, and requires a 30-week lead time from an outside wheel mold shop. The tooling costs have been quoted at $60,000. Transportation of finished wheels to Toledo has been quoted at 4 weeks. The price is $50/wheel. For any wheel volume equivalent of vehicles over 5,000, Carnival can offer the wheels for $40/wheel. As Carnival is anxious to grow the partnership with FCA, the supplier has offered to provide transportation costs free of charge to FCA.
Your Task
Which supplier(s) would you choose? Make your case for a supplier (or suppliers) of choice. If you choose to multi-source, how would you share the volume?

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