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PortfolioFICTIONAL SCENARIO
JOSHUA PALACIOS / AI & STRATEGIC SOURCING

I use AI to build
better sourcing tools.

This working prototype turns a supplier comparison into a repeatable decision process. Adjust the brief, inspect the tradeoffs, and see the questions I would take to finance, quality, and operations.

AI assists the build. Procurement owns the decision.

AI helped create this tool. Its calculations use visible formulas and rules; each recommendation still needs commercial and operational review.

Choose chemical sourcing or industrial equipment, then test the cost, speed, and risk tradeoffs. All suppliers, prices, risk ratings, and outcomes are fictional and separate from Joshua Palacios’s career results.

Source the material. Protect the supply.

Compare delivered material cost, inventory commitments, and qualification against supply needs.

Set the brief

Adjust relative importance. The model normalizes the weights to 100%.

Evaluated cost35%

Purchase + freight + carrying + qualification

Replenishment speed25%

Shorter quoted lead times score higher

Supply resilience40%

Lower illustrative risk scores higher

Eligibility comes first

A weighted score cannot override these requirements.

Maximum lead time 60 days

Only approved suppliers are eligible.

MODEL FRONT-RUNNER

Supplier A

Supplier A leads among 2 eligible suppliers. Its largest weighted contribution is lower supply risk. The model supports moving to commercial and operational review.

$1,059,168Modeled first-year cost
14 daysQuoted lead time
51.2/100Weighted score
The tradeoff

This option costs $71,388 more than the lowest-cost eligible quote. The selected priorities favor its speed and lower illustrative risk.

See what drives the ranking

Weighted points / 100
CostSpeedResilience
Supplier ARegional incumbent
51.2
Supplier BApproved distant source
47.0
Supplier CNew local candidate
Excluded

Qualification pending

Eligibility is checked before ranking. Excluded quotes remain visible for comparison.

JOSHUA PALACIOS / DECISION BRIEF

How I would take this forward.

Fictional supplier scenario · AI-assisted build · Transparent, rule-based calculations

Assumptions600,000 kg / year · maximum 60 days · approved suppliers only · cost 35% / speed 25% / risk 40%

Supplier A · $1,059,168

Supplier A leads among 2 eligible suppliers. Its largest weighted contribution is lower supply risk. The model supports moving to commercial and operational review.

This option costs $71,388 more than the lowest-cost eligible quote. The selected priorities favor its speed and lower illustrative risk.

First-year cost breakdown in USD. Excludes taxes, duties, safety stock, disruption losses, and other transition costs. Qualification allowance applies once; its duration is unknown.
Cost componentSupplier ASupplier BSupplier C
Material$1,008,000$912,000$864,000
Freight$48,000$66,000$30,000
Carrying$3,168$9,780$1,788
One-time qualification$0$0$30,000
Total$1,059,168$987,780$925,788
EligibilityEligibleEligibleExcluded: Qualification pending
01 / FINANCE

Validate the business case

The incumbent remains the front-runner, with no modeled cost reduction against its own quote. Validate the baseline, omitted transition costs, and timing with finance. This is a scenario comparison, not realized savings.

02 / QUALITY & OPERATIONS

Confirm supply readiness

Confirm Supplier A's capacity commitment and delivery performance with operations. Validate the shorter replenishment route and maintain a credible backup source.

03 / PROCUREMENT

Set the negotiation agenda

Use competitive offers to challenge incumbent pricing. Explore formula pricing and supply commitments while developing qualified alternatives.

THE QUOTE SHEET

Three offers. Different commitments.

All values are fictional · USD
Single-source comparison: each candidate must cover the full annual demand. Split awards and backup capacity are not modeled.
Compare the offerSupplier ARegional incumbentSupplier BApproved distant sourceSupplier CNew local candidate
EligibilityEligibleEligibleExcludedQualification pending
Material price / kg$1.68$1.52$1.44
Freight / kg$0.08$0.11$0.05
Landed price / kg$1.76$1.63$1.49
Modeled first-year cost$1,059,168$987,780$925,788
Quoted lead time14 days45 days10 days
Minimum order18,000 kg60,000 kg12,000 kg
Annual available capacity900,000 kg1,200,000 kg700,000 kg
Payment termsNet 45 daysNet 60 daysNet 30 days
QualificationApprovedApprovedPending
Illustrative risk index0 = lower risk · 100 = higher risk20/100Established relationship and a short replenishment route; highest landed price.45/100A longer replenishment route and larger order commitment increase exposure.65/100Fast and competitively priced, with limited performance history and qualification still open.
Inspect the model

First-year cost

Annual volume × (material price + freight) + cycle-stock carrying cost + one-time qualification allowance.

Average cycle stock = half the minimum order. Carrying cost = average cycle stock × landed unit price × 20% per year.

Cost components in USD, rounded for display.
ComponentSupplier ASupplier BSupplier C
Material$1,008,000$912,000$864,000
Freight$48,000$66,000$30,000
Carrying$3,168$9,780$1,788
Qualification$0$0$30,000

Where AI fits

AI assisted in building this prototype. The displayed scores and review brief come from explicit rules, with no live AI model generating recommendations. The fictional risk ratings are inputs to inspect, not AI predictions.

Scoring

Cost: lowest modeled quote = 100; highest = 0; other quotes fall linearly between them. All three quotes define this scale, including excluded candidates.

Speed: 100 × (60 − quoted lead days) ÷ 60. Resilience: 100 − the illustrative risk index. Each score is multiplied by its normalized priority weight.

Scores within 0.01 points are treated as tied. Risk ratings are scenario assumptions, not measured probabilities.

Scope of the model

Assumes stable annual demand, full MOQ consumption, one qualified source for all volume, and no capacity reservation. Excludes taxes, duties, safety stock, in-transit inventory, disruption losses, and other transition costs. Payment terms are shown for context and are not monetized. Candidate C’s quoted lead time starts after qualification; qualification duration is unknown.

No orders are placed and no suppliers are contacted.

HOW I PUT AI TO WORK

From a business question
to a working tool.

The value is a repeatable analysis that gives stakeholders a clear starting point for a decision.

  1. 01

    Define the sourcing problem

    I set the brief: compare the cost to serve, expose supply tradeoffs, and keep qualification and capacity visible.

  2. 02

    Use AI to build the workflow

    AI assists with the implementation: calculations, scenario controls, comparison views, and the review brief. This prototype demonstrates that approach.

  3. 03

    Test the logic, then challenge the answer

    The model is checked for cost accuracy, ties, invalid inputs, and cases where no supplier qualifies. In practice, I would validate source data and assumptions with finance, quality, and operations before an award.