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SCM 4143 Global Supply Chain Management
Case Whirlpool Corp Global Procurement
Written Report Requirements (0 – 20 scale) (you must attach/upload the Excel file with your
work supporting your analysis in the report)
* Utilize writing guidelines set in the syllabus
* Cover page with Title and Date
* Concisely written and free from errors
* Professional caliber manuscript –QUALITY COUNTS.
* Neatly Typed–11 or 12 point font, Courier or Times Roman.
* Double Spaced.
* 1 inch margins.
* Pages Numbered, center bottom
* Detailed table of contents–with page numbers.
* References in APA style
* Charts and other visual analytics are expected to be of high quality and free from errors
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This case introduces a framework for cost modeling and provides an opportunity to apply the
cost-driver framework in conjunction with basic spreadsheet/ regression analysis. By comparing
costs and prices from different regions of the world, the organization begins to explore the
economic tradeoffs in global sourcing. You should understand that:
a. Cost models are fundamental in setting a sourcing strategy and can be powerful in price
negotiations as well
b. When modeling, start simple and add complexity as needed
Most of the work required in this case is about organizing and classifying data for comparison
and produce ways to assist purchasing managers make intelligent decisions – decisions that can
be justified by the data. When addressing case questions below, use table, graphs, plots and even
regression modeling tools available in Microsoft Excel/Tableau to prepare and present a full
report of your findings.
Assigned Work:
1) Introduction: Before delving into the various analyses possible in this case, it is important to
set a context for the reason for cost modeling and some of the terminology used in this case. In
setting up the introduction, incorporate a brief discussion of the following: (0-10 scale)
Why should Whirlpool Corp. be interested in cost modeling? How can they use supplier cost
models in procurement?
What is the point in case Exhibit 2? Can this framework apply for retailers such as Home Depot,
Wal-Mart?
2 of 2
2) Develop a parametric model (linear model) demonstrating the key cost drivers for
compressors. (0-40 scale) – (this section will need Excel or Tableau). Use the guidelines below
to help in this activity.
Use Exhibit 3 to assist you with this question. Summarize data by cost, capacity, weights, EER,
and volume per region. Remove null or missing data.
Provide bar graphs showing total volume by regions differentiating types of compressors.
Provide a similar graph showing average part costs.
Plot (using scatter plot) cost drivers (capacity, EER, and Weight) in the horizontal axis and price
in the vertical axis for the different sources (regions). This will help you understand the
relationship of the variable with price and the differences across regions.
Finally, estimate a regression model to identify the strength of the relationship between the cost
drivers and price (and perhaps make prediction.)
3) Using results from 2), prepare a formal report for an executive audience. What
recommendations would you make to Whirlpool Corp? Note that the best sourcing decisions
requires far more information than a simple price quote or even an initial cost model, but they
can be used for negotiations and further understanding of total costs involved in the production
and delivery of goods and services. There is no need for an executive summary in this case.
Cut/paste relevant output from Excel/Tableau in the analysis document (0-40 scale)
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