De Havilland Inc

1237 Words5 Pages
Table of Contents Executive Summary 4 Issues Identification and Case Analysis 5 Alternatives or Options 7 Recommendation 9 Implementation 10 Monitor and Control 11 Executive Summary At De Havilland…show more content…
To avoid going through an extensive purchasing process BSB want to have fixed pricing with long term contracts. Potential bids are in different formats so hard to analyse DH Inc requested the same information from all nine suppliers but all suppliers had a different approach when it came to bidding. Some suppliers included the tooling cost as a single charge while some chose to include the cost as part of expected production. Some submitted financial statements, detailed product costing and some didn`t. Bids were different from including delivery terms, spare parts policy, direct labour rated and indirect allocation costs which made it difficult to analyse in the same level. Alternatives or Options Option 1: Award the bid to Marton after confirming quality meets DH standards Pros:  Lowest price from all bids so DH Inc saves $2,061,180 which reduces manufacturing costs and gets more than the 25% discount wanted.  Longer contract avoid constant monitoring, frequent negotiations and price stability.  Meets BSB`s expectations of fixed pricing and longer contract period. Cons:  Quality might suffer due to the demand to keep price low.  New supplier means new territory won`t know how they would perform or if they would meet all expectations which also means risking losing a good supplier like Dollard Plastics Option 2: Negotiate
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