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John Morton, Director of Materials Management for Computer Products Corporation

question 6

Essay

John Morton, director of materials management for Computer Products Corporation CPC) in San Jose, is now reviewing next year's plans for the supply of a component that is now purchased from Osiega Ltd., a company in Japan. The component is the PS100 power supply assembly that is used in many of CPC's products.
CPC pays the supplier more than $7 million per year for these units, and John wonders if money could be saved by developing another supplier for this component or if CPC should gear up to manufacture the power supply assemblies in-house within one of the CPC's own production plants.
John's purchasing-analysis staff has developed the following estimates:
The purchasing-analysis group has learned that CPC will need about 550,000 of the PS100 units next year.
a. Which supply source provides the least cost for next year?
b. How many PS100 units would have to be bought next year for each of the sources to be the least-cost source?

Understand the implications of the law of diminishing returns on productivity and output.

Understand the graphical representation and interpretation of production functions, including total product curves.

Understand and explain various cognitive biases and their impact on decision making.

Differentiate between various cognitive biases such as confirmation bias, framing effect, availability heuristic, and representativeness heuristic.

Definitions:

HR Activity

This pertains to operations and tasks carried out by the Human Resources department, including recruitment, training, employee relations, and benefits management.

Performance Management Activities

Various actions taken by an organization to plan, monitor, and review an employee's work objectives and overall contribution to the organization.

Training/Development

The educational process of enhancing an individual's skills, knowledge, and competencies for career advancement or performance improvement.

Performance Management Review

A systematic evaluation process by which employee performance is assessed and feedback is given to promote development and improvement.