This Table Contains the Performance Criteria and Scores (Larger Numbers

question 8

Multiple Choice

This table contains the performance criteria and scores (larger numbers are better) for four potential suppliers to Kramerica Industries. Evaluate the data and identify the BEST source for Kramerica. $$\begin{array} { | l | c | c | c | c | } \hline \text { Performance Dimension } & \text { Company A } & \text { Company B } & \text { Company C } & \text { Company D } \\\hline \text { Quality } ( \mathrm { W } = 0.4 ) & 3 & 4 & 2 & 5 \\\hline \text { Cost } ( \mathrm { W } = 0.3 ) & 4 & 3 & 5 & 3 \\\hline \text { Flexibility } ( \mathrm { W } = 0.2 ) & 5 & 3 & 4 & 2 \\\hline \text { Speed } ( \mathrm { W } = 0.1 ) & 2 & 5 & 5 & 4 \\\hline\end{array}$$

• A)Company A
• B)Company B
• C)Company C
• D)Company D

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Definitions:

Fixed Cost

Expenses that do not change in the short term, irrespective of the level of production or sales volume.

Average Total Cost

The total cost of production divided by the number of units produced, calculating the per-unit cost to produce goods or services.

Variable Cost

Costs that change in proportion to the good or service that a business produces, such as raw materials and labor.

Fixed Costs

Costs that do not change with the level of output or production, such as rent, salaries, and insurance payments.