Running head: CAPITAL STATE ARENA

Capital State Arena: A Case Study Review

BUS 612

CAPITAL STATE ARENA

Capital State Arena: A Case Study Review

Overview
A review of the lighting requirements for the newly designed Capital State Arena
revealed several necessities that must be considered, by the purchasing agent, to ensure they
meet the needs of all users of the arena. Since the arena will be utilized for a variety of events, to
include the potential to lease the system for at $2K per day, the lighting system, and controls
must first and foremost be flexible for the multiple applications and expandable to meet
additional needs (Benton, 2014). Additionally, the system must be easy to learn and operate,
with computer-controlled software that is capable of updates (Benton, 2014). Furthermore, the
system must be made in the in U.S., or the supplier must have ready access to facilitate repairs in
24 hours or less. Moreover, the lighting controls should be purchased from a local supplier that
provides a two-year warranty on service and components (Benton, 2014). Finally, the vendor
must agree to provide back-up equipment, in the event of failure, to avert any loss of income, to
the arena for paid scheduled events (Benton, 2014).
Supplier Selection and Evaluation Model for Purchasing Decision
According to Parthiban, Zubar and Katakar (2013) traditionally, supplier selection was
based on costs factors; however, organizations have evolved and recognized the inefficiency of
this method. Supply sourcing methods enable companies to realize reduced costs, enhanced
performance, and overall increased profits (Parthiban et al., 2013). Therefore, the main
components to supply sourcing are evaluation and selection based on factors such as cost,
quality, service, delivery, etc. (Parthiban et al., 2013). Benton (2014) notes several methods of
supplier sourcing and evaluation systems, of which, the linear averaging is the most common.
The linear averaging method compares quantitative data to assess the manufactures performance

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(Benton, 2014). As the purchasing agent for the new lighting system, it was determined that the
linear averaging system was the most beneficial to evaluate the suppliers ability to meet the
needs of the end-users, the service capability requirements, as well as justify the overall best
value.
After considering the needs for the new lighting system and console, a requisition was
sent to the purchasing department. The purchasing department identified three manufacturers
that met most of the requirements and obtained technical data sheets and pricing for their
respective systems. This information was reviewed and utilized to compare each unit for ease of
use, based on the recommendations of lighting designer (Benton, 2014). Additionally, the
warranty and replacement equipment requirements were evaluated and considered. Finally, the
cost for each unit was considered with each factor determined by the weight of importance to the
university and calculated using the following linear averaging system:

Ease of Use (weight = 50)

Factors evaluated
Total factors considered
Ease of use rating
Service (weight = 35)
Factors evaluated
Total factors considered
Service rating
Cost (weight = 15)
Lowest Price
Price submitted
Price rating
Total Performance
Rating

ETC

Leprecon

Strand

6
6
100

4
6
83.3

5
6
83.3

2
2
100

1
2
50

1
2
50

$59,997
$96,777
62

$59,997
$86,697
69.2

$59,997
$59,997
100

94.3

61.23

74.15

Upon review, it was determined that the unit, produced by ETC, although higher in price,
met all of the six factors for ease of use, warranty, and back-up requirements, and scored the

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highest in total performance rating with a 94.3 percent. The unit produced by Leprecon,
although cheaper, was not user-friendly and had limited expandability, and only was backed by a
one-year warranty, which resulted in an overall performance rating of 61.23 percent.
Additionally, the unit produced by Strand, although the lowest price, failed to meet the
expandability requirements, as well as the ability to provide a back-up replacement upon failure
of their unit, resulting in an overall performance rating of 74.15 percent. Finally, it was
determined that the unit, produced by ETC was the best value based on user-friendly factors, and
service after the sale (Benton, 2014).
Purchasing Team Development and Fulfillment of End Users Needs
Benton (2014) identifies that determining the vendor, and negotiating the price as two of
the important functions of the purchasing department. As previously stated, the purchasing agent
determined that the lighting system console, produced by ETC was the best value for the
university by utilizing the linear averaging method. Additionally, the theater department came to
the same conclusion for best meeting the end users needs (Benton, 2014). The purchasing
agent knew that the differences in opinion between the university purchasing team and the
ultimate end users posed a complicated purchasing decision (Benton, 2014, p. 475). Although
the ETC console was the most expensive unit, it satisfies the needs of the end users; however, the
difference in opinion lies with the purchasing team and their decision that the Strand unit was the
best value regarding price (Benton, 2014).
The theater department and resident lighting designer determined that the lighting
console must meet the following factors to satisfy the needs of the end users (Benton, 2014).
1). The console must be user-friendly 2). The console must be expandable 3). The console must
have several hundred unused channels 4). The console software should have the capability for

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future upgrades 5). The console should have the capability to adjust the lighting for different
events. 6). The console should be easily programmed (Benton, 2014). Additionally, to satisfy
the needs of service and dependability, it was determined that 1). The unit must meet criteria to
ensure repairs are rendered in 24 hours or less 2). The console should include, at a minimum, a
two-year warranty with a dealer provided back-up, to ensure 100 percent coverage, in the event
of a system failure (Benton, 2014). The following matrix provides a needs assessment for both
the university purchasing team and the end users requirements, on a scale of 1-3. The rating
scale of 1 = does not meet, 2 = partially meets, 3= meets or exceeds.

End User
Factors
1
2
3
4
5
6
Reliability
Factors
1
2
Team Factors
1
Totals

ETC

Lepreco
n

Strand

User-friendly
Expandability
Several hundred extra channels
Upgradeable software
Easily adjustable lighting control
Easily programmable

3
3
3
3
3
3

1
1
2
3
3
2

3
1
1
3
3
3

Repairable in 24 hours or less

Two-year warranty with back-up

3
3

3
1

2
1

Lowest Cost

1
25

2
18

3
20

Suffice it to say, the ETC system garnered the highest rating of 25 and met or exceeded
all end users needs and reliability factors; however, regarding pricing, did not satisfy the desires
of the purchasing department. The Strand system garnered the second highest rating of 20, and
although it met or exceeded the purchasing team factors, regarding pricing, it did not satisfy all

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end-users needs or reliability needs. Lastly, the purchasing team and the theater department
both concurred that the unit, produced by Leprecon, did not score well enough to satisfy their
requirements.

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7
References

Benton, W.C. Jr. (2014). Purchasing and Supply Chain Management (3rd ed.). New York, NY:
McGraw-Hill Irwin.
Parthiban, P., Zubar, H. A., & Katakar, P. (2013). Vendor Selection Problem: A Multi-Criteria
Approach Based on Strategic Decisions. International Journal of Production Research,
51(5), 1535-1548.