(a) Describe a supplier evaluation approach that HFS could use to select a bidder using the table provided, including a proposal for an appropriate weighting method for scoring the bidders.
(10 marks)
(b) Recommend and justify which ONE of the bidders should be awarded the contract and why each of the three other bids should be rejected.
(15 marks)
Heart Financial Services
Heart Financial Services (HFS) is a medium-sized private sector financial services company, with a iarge office headquarters m the suburbs of a major city. HFS has just received the bids shown below in response to an invitation to tender for a five-year contract to provide cleaning services for this office building.
in the past five years, HFS paid €160,000 for these cleaning services: but HFS was not satisfied with the quality of Cleaning service that was provided. The existing cleaning contractor. DuffOean. was getting to the end of the contract and had not bid this time.
Bid price (5 year contract) International Organization for Standardization: ISO 9000 certification Investors in People (IIP) certification International Labour Organization: (ILO) certification International Organization for Standardization: ISO 14000 certification Associated Cleaning (A): €120.000 No Yes NO No Brlght'N'Clean (B): €135.000 No Yes Yes No CleenKwik (C): €132.000 Yes Yes Yes Yes Doubleshine (D): €M2.000 No No No No

See the answer in explanation.below.
Explanation:
2(a) Describe a supplier evaluation approach that HFS could use to select a bidder using the table provided, including a proposal for an appropriate weighting method for scoring the bidders. (10 marks) HFS should use a weighted scoring supplier evaluation approach . This method is suitable because there are several award criteria, not just price, and HFS has already experienced poor cleaning quality under the previous contract. Therefore, HFS should assess both cost and quality-related factors before selecting the successful bidder.
A sensible approach would be:
Step 1: Set evaluation criteria
Using the tender table, HFS can evaluate bidders against:
* bid price
* ISO 9000 certification
* Investors in People (IIP) certification
* labour standards criterion linked to ILO requirements
* ISO 14000 certification.
ISO says the ISO 9000 family supports quality management and consistent delivery, while ISO 14001 is the recognised framework for environmental management. Investors in People is an externally recognised accreditation for people management.
Step 2: Apply weightings
Because HFS was not satisfied with the quality of the previous cleaning service, quality and service assurance should carry more weight than price alone. A suitable weighting could be:
* Price = 40%
* ISO 9000 = 25%
* IIP = 15%
* ILO criterion = 10%
* ISO 14000 = 10%
This totals 100%. The reason for this weighting is that price is important, but service quality should be prioritised for a five-year contract. ISO 9001 is especially relevant because it is the best-known quality management standard and is intended to support consistent products and services. ISO 14001 is also relevant because it gives assurance on environmental management.
Step 3: Score the bidders
For price , HFS could award the full 40 marks to the lowest bid and score the others proportionately using the formula:
Lowest bid ÷ bidder's price × price weighting
Using €120,000 as the lowest bid:
* A = 120,000 / 120,000 × 40 = 40.00
* B = 120,000 / 135,000 × 40 = 35.56
* C = 120,000 / 132,000 × 40 = 36.36
* D = 120,000 / 142,000 × 40 = 33.80
For the certification criteria, a simple method would be:
* Yes = full marks
* No = zero
So the total weighted scores would be:
* A = 40 + 0 + 15 + 0 + 0 = 55.00
* B = 35.56 + 0 + 15 + 10 + 0 = 60.56
* C = 36.36 + 25 + 15 + 10 + 10 = 96.36
* D = 33.80 + 0 + 0 + 0 + 0 = 33.80
Overall, this weighted evaluation method is appropriate because it gives HFS a transparent and objective way to compare bids while reflecting the importance of service quality, people management and environmental standards, not just lowest price.
2(b) Recommend and justify which ONE of the bidders should be awarded the contract and why each of the three other bids should be rejected. (15 marks) Based on the weighted scoring analysis, CleenKwik (C) should be awarded the contract.
Recommended bidder: CleenKwik (C)
CleenKwik should be selected because it offers the best overall value rather than just the lowest price. Its bid of €132,000 is only slightly above the lowest bid, but it is the only bidder with all four listed accreditations or compliance indicators in the table: ISO 9000, IIP, ILO criterion and ISO 14000 . This is important because HFS has already had poor service quality from the previous contractor, so quality assurance should be a major factor in the decision. ISO 9001 is specifically designed to support consistent service quality, while ISO
14001 supports structured environmental management. Investors in People also gives assurance on workforce management, which is relevant in a labour-intensive cleaning contract.
CleenKwik therefore represents the strongest balance between price, quality, staff management and environmental responsibility . For a five-year service contract, that makes it the most suitable choice.
Why Associated Cleaning (A) should be rejected
Associated Cleaning has the lowest price at €120,000 , but it only has IIP certification and lacks the other three criteria. This means it gives weaker assurance on quality systems, labour standards and environmental management. Since HFS's main problem in the last contract was poor cleaning quality, selecting the cheapest bidder without strong quality evidence would be risky. Therefore, A should be rejected because the low price does not compensate for the lack of broader service assurance.
Why Bright'N'Clean (B) should be rejected
Bright'N'Clean is a stronger bid than A because it has IIP and the ILO-related criterion , but it still lacks ISO 9000 and ISO 14000 . This is significant because ISO 9001 is the strongest direct indicator in the table for quality management, and HFS is specifically trying to avoid another poor-quality contract. B is also more expensive than both A and C. Therefore, B should be rejected because it offers less assurance than C while not being the cheapest option.
Why Doubleshine (D) should be rejected
Doubleshine should be rejected because it is the highest-priced bid at €142,000 and has none of the listed certifications or indicators. This means HFS would be paying the highest price for the weakest quality and compliance evidence. There is no justification for awarding the contract to D when it scores lowest on overall value.
Conclusion
In conclusion, CleenKwik (C) should be awarded the contract because it achieves the highest weighted score and provides the strongest evidence of quality, people management, labour-related assurance and environmental management. The other three bids should be rejected because they either provide insufficient quality assurance, poorer overall value, or both. This recommendation is justified because HFS needs to improve service quality, not simply reduce cost.

Explain three strategic decisions that could be made or enhanced by using the STEEPLE or SWOT analysis

See the answer in explanation.
Explanation:
By using STEEPLE and SWOT analysis, the organization can reach out to the following strategic decision in how it will engage with its external environment, and utilize it strength to cover up for its weakness and achieve its strategic goals;
1) STEEPLE can aid an organization to come up with informed decision by understanding when is the right time to procure goods or services?
2) STEEPLE and SWOT analysis can uncover the quantity that could be most economical to ac-quire at the point in time.
3) When an organization want to decide on the currency that could be most favorable for the buy, it will analyze the countries involved and the strength of their currency and make its decisions on which currency that the supplier should be paid that will not make the organization to lose unnecessary money to exchange.
4) Should the product or services be made or bought?
5) Should the product or services be resourced?
6) Should the product or services be placed?

Which Incoterm applies here?
The supplier is responsible for delivering the goods to a point alongside a water vessel (such as a dock or quay) as determined by the buyer at a named port. Once delivered, all risk is transferred to the buyer until the goods are transported and delivered to their name destination.

• A. DDP - Delivery Duty Paid
• B. DAP - Delivered At Place
• C. DAT - Delivered At Terminal
• D. FAS - Free Alongside Ship

When benchmarking what other factors, apart from price should be considered to find the total cost of acquisition?

See the answer in explanation.
Explanation:
When evaluating potential suppliers, procurement professionals can carry out benchmarking. Benchmarking is the process of comparing a function, a process performance with another which is best in-class.
Other factors, apart from price that can be considered to find the total cost of acquisition include the product or service quality, lead time, supplier culture, its environmental awareness and sustainability.
Case study:
Tetsuya Tada, Chief engineer of the Toyata Supra Sports car has revealed how the process of benchmarking contributed to the car's design.
Tada has worked by comparing the Supra to other cars. For example, it has been intentionally designed with a shorter wheelbase, than the Toyata 86 to make it more suitable for track racing. Furthermore, Tada has benchmarked the Supra against competition by suggesting that drivers will find the car's performance comparable with that of Posche's Cayman sports car.
Tada's knowledge of the features belonging to different sports cars in his industry shows how benchmarking can be used by companies to successfully differentiate their products and remain competitive through awareness of their competitor's activities.

Describe three ways in which a buyer could or test the market in other to assist with determining a need.

See the answer in explanation.
Explanation:
Once the need has been understood, defined, justified and authorized, the next stages are to analyze and test the market. Analyzing and testing the market includes looking at the following
1. STEEPLE analysis
2. SWOT analysis
3. Porter's five forces
4. Level of suppliers competition
5. Supply and demand
6. Push and pull
7. Supplier segmentation
8. Product life cycle
9. Ansoff matrix
10. Early supplier involvement
11. Make or buy
12. Offshoring
1. Porter's five forces: The use of porter's five forces helps the procurement professional to understand the level of competition within the marketplace. Whether it is a monopoly, oligopoly, imperfect or perfect market.
Knowing these will equip the organization to better negotiate a favorable price.
2. Supply and Demand: the procurement professional must also think about supply and demand as part of their market analysis when they receive a requisition. This economic factor has a significant effect on the prices charged and on the cost incurred.
3. Supplier segmentation: in this the procurement professional start to form an opinion of potential suppliers..
They can segment current suppliers into four categories, depending on their level of integration into an organization. This can help to inform the procurement professional of which type of supplier relationship that would be most appropriate.