Suppose a factory has a learning curve of 80%. It started with a unit cost of $10 for producing 1000 units. What is the unit cost for producing 4000 units?

In cost modeling, what-if analysis is very useful because model assumptions could be wrong. 

Procurement is responsible for a smaller percentage of end-item value compared to the past.

An analyst conducted parametric cost modeling and found the following formula (all estimates are significant): total cost = 3.5 + 1.2*weight + 2*size – 0.8*(made in Canada). In his model,  (made in Canada) is a binary variable that equals 1 if the product is made in Canada and equals 0 if it is made in the U.S. Based on this analysis, we can see that products made in Canada are more expensive than those made in the U.S. 

The Pareto Principle refers to the common finding that 80% of results tend to be produced by around 20% of causes. 

In the Metalcraft case, varying objectives and incentives strengthened the procurement process.

Suppose the firm already knows the specifications of the product it wishes to source. Which of the following RFxs is NOT appropriate in this situation?

The “Third Way” sourcing strategy as mentioned in the VF Brands case would fall where on the continuum of sourcing arrangements:

Well-designed supplier scorecards can be used to do all of the following EXCEPT:

Lowest cost is often times not the most important attribute for supplier selection