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July 29, 2020

Who is most likely to win the business? Why?

A Chicago-based manufacturer is looking for someone to handle its shipments to the West Coast. In order to evaluate potential transportation providers, the manufacturer has developed the following criteria. At a minimum, a shipper must be able to:

a. Pick up shipments in less than eight hours from the time it is notified (the manufacturer doesn’t have enough space for shipments to sit around at the dock).

b. Deliver shipments in 72 hours or less. Beyond this, shippers will be evaluated according to cost and the percentage of shipments that arrive undamaged. Three shippers—McAdoo, Klooless, and Big Al—have put in bids for the business. The relevant performance information for the shippers is shown in the following chart:

	MCADOO	KLOOLESS	BIG AL
Pickup time	6 hours	8 hours	9 hours
Shipping time	48 hours	72 hours	36 hours
Cost per 100 lbs. shipped	$20	$30	$15
% of shipments that arrive	98%	95%	99%
undamaged

a. (**) Using Figure 2.3 as a guide, graph how well each of the shippers performs with regard to the order winners

and qualifiers.

b. (**) Who is most likely to win the business? Why?

c. (**) What’s going on with Big Al? What does Big Al need to do in order to compete successfully for the business?

d. (**) Comment on Klooless’s competitive position. Does it meet the minimum requirements? Is the company very competitive? Why or why not?

Management

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