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Whirlpool Corporation Global Procurement Case Solution
| Solution Id | Length | Case Author | Case Publisher |
|---|---|---|---|
| 2461 | 1341 Words (6 Pages) | Timothy M. Laseter | Darden School of Business : UV0341 |
A Word File
The Whirlpool Company is the world's top manufacturer and marketer of major home appliances, with annual sales of almost $19 billion, 70,000 employees, and 68 engineering and development research facilities throughout the globe. Customers may purchase the company's goods in almost every country, including prominent names like Whirlpool, Maytag, KitchenAid, Jenn-Air, Brastemp, and Bauknecht. Material costs may be affected by the scrap and defect rate, but we weren't given this information. Geography and Operations both affect labour costs per unit because of pay rates and labour productivity (which could also be influenced by parts per mould and shifts in each region). However, it is shown that both parts per mould and shift drivers are negatively linked with the average hourly income of a driver, according to the data. The cost of the re-distributed creation is included the cost of the item, administration, transportation, storage and capacity, and labour expenses for dealing with the coordination. Finding evidence that one area is functioning better than the others, and that one supplier is providing superior results tossed in for good measure, are the primary goals of cost modelling.
Following questions are answered in this case study solution
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Why should Whirlpool Corporation be interested in cost modeling? How can they use supplier cost models in procurement?
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What’s the key point in case Exhibit 2? Can this framework apply to your organization?
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The context of the case is the purchase of manufactured products. Do the ideas around cost modeling fit if you were sourcing services for your company?
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Thinking of the range of services a company might source from outside suppliers—simple things like custodial or security services, versus complex services like legal or consulting—how would the applicability of cost modeling vary?
Case Analysis for Whirlpool Corporation Global Procurement
1. Why should Whirlpool Corporation be interested in cost modelling? How can they use supplier cost models in procurement?
Cost modelling as a tool for business and corporate performance is vital in an organization's daily operations. Any company should look into this technology because of the benefits it offers. It can be a very useful tool for companies that are still trying to find a balance in their daily operations and also among competitors. In this case, Whirlpool Corporation can discuss in-depth with its suppliers to achieve equilibrium. Whirlpool Corporation should investigate cost modelling because it will help them understand how to reduce the margin between itself and its suppliers.
It also teaches students that in business, you get what you bargain for and persuade your clients to get. Supplier collaboration is also an important part of cost modelling. As a result, Whirlpool will improve product quality by gaining supplier attention and insight. They will be able to identify the growth rates of their raw materials, such as steel, and also know how to get the most out of their works by collecting supplier information. Tactically, a clear cost model can help distinguish and pick between two people selling the same product. One will be able to select their agent. In other cases, it can be used to execute and find the optimal number sequence.
Cost modelling is one of the most accurate and reliable decision-making tools. This is because it accounts for labour, materials, and manufacturing costs in maintenance and facilities management. Cost modelling also considers capacity and the best areas for a company like Whirlpool to thrive. This illustrates how cost modelling can be used to help make decisions about procurement costs and the development of new products. Cost modelling also helps managers understand how different pricing affects the final product. In other cases, it will help the management of a company like Whirlpool make well-informed decisions in future planning and resource allocation. This is because it captures raw material costs, trends, and their impact on firm output.
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