The primary criterion for service or material selection in supply management should be the total cost of ownership (TCO). TCO considers not only the purchase price but also all other costs associated with the acquisition, use, maintenance, and disposal of the service or material. This holistic view ensures that supply management makes decisions that are cost-effective in the long run, balancing initial costs with operational and end-of-life expenses. Quality (Option B) and price (Option C) are important, but they do not capture the full spectrum of costs. Sourcing limitations (Option A) are constraints rather than primary criteria.
References:
Supply Chain Management: Strategy, Planning, and Operation by Sunil Chopra and Peter Meindl
Total Cost of Ownership Analysis in Procurement
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