Case Study 3 Selection of a Pressure Vessel Manufacturer

.doc

School

Strayer University, Washington *

*We aren’t endorsed by this school

Course

599

Subject

Industrial Engineering

Date

Dec 6, 2023

Type

doc

Pages

Uploaded by mrconyers1110

Selection of a Pressure Vessel Manufacturer 1 Selection of a Pressure Vessel Manufacturer Andre Conyers Webster University PROC 5830: Pricing Professor Doug Mowczko

Selection of a Pressure Vessel Manufacturer 2 1. Major Facts For the procurement of one pressure vessel, Oceanics, Inc. sent a request for bids to twenty significant pressure vessels. The supply manager, Jack Toole, requested bids from twenty renowned pressure vessel manufacturers to facilitate this acquisition. Eighteen businesses submitted the bids. The Atomic Products Company and Nuclear Vessels, Inc. were the two businesses that made the shortlist. Atomic Products had no prior expertise with vessels of this size but provided a reduced anticipated price, assured equipment, and a better location. Nuclear Vessels had outdated equipment but offered reduced hourly and overhead rates, little subcontracting, and previous expertise with similar vessels. 2. Major Problem Choosing which of these businesses is the better option for the pressure vessel manufacturing contract is difficult because each has different benefits and drawbacks that the company ought to consider. The providers offer advantages and disadvantages, so Oceanics must carefully consider them before choosing because the decision-making process involves more than just comparing costs and rating experiences. Oceanics must consider the manufacturing facilities and tools available at each supplier since they can affect the standard and effectiveness of production; the vendors' warranties must be considered since they address things such as equipment quality and craftsmanship. Atomic Products Company provides advantages, such as a lower estimated price and a guarantee for the equipment. However, they need to gain experience in manufacturing vessels of the

Selection of a Pressure Vessel Manufacturer 3 required size, raising concerns about their ability to meet specifications. Nuclear Vessels, Inc., on the other hand, provides advantages such as lower hourly and overhead rates, minimal subcontracting, and experience with similar vessels. However, they have older equipment, which might affect their efficiency. 3. Possible Solutions A. Selecting Atomic Products Company would mean Oceanics, Inc. would save money on the project due to their lower estimated price of $1,232,000. Cost savings are crucial in procurement decisions and can positively impact Oceanics' budget. B. The Nuclear Vessels, Inc. is offering a lower hourly and overhead rate, which could result in savings cost over the project's duration. The fact that Nuclear Vessel has had a positive working relationship with Oceanics in the past is also a valuable asset, as it shows successful collaboration. 4. Possible Solutions Advantage A The lower prices would mean Oceanics Inc. would save costs, reducing more expenses on its budget. Disadvantage A Atomic Products Company cannot manufacture the size of the vessels that Oceanics needs due to a lack of competence. Due to their inexperience, there is uncertainty as to whether they will be able to fulfill the technical standards set by Oceanics (Ingemarsdotter et.al, 2021). Also, there would be uncertainty on whether they can deliver a product meeting the necessary quality and safety standards. Advantage B

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help