AGC Pharma Chemicals - Teaching Note

AGC produces the active ingredient of Micardis, a well-known antihypertensive drug sold by Boehringer Ingelheim. To manufacture the active ingredient, AGC needs to purchase so-called starting materials. Choosing suppliers for starting materials is an important decision, as it affects the efficiency of the production process, the quality of the active ingredient, the service level to clients, and compliance with EMA and FDA regulatory standards. The case discusses how to use multi criteria decision making techniques, where besides a financial objective (cost minimization), other qualitative criteria must also be considered.