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Placido Engine Company Essay

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PLACIDO ENGINE COMPANY I. Major Facts

Placido Engine Company is a division of the General Products Corporation, a $2 billion company that enjoyed a worldwide reputation for quality and leadership in aviation, aerospace, and industrial products. So it is imperative that Placido Engine Company performs at its best and assures it delivers top quality products and services. Placido had built more than 45,000 gas engines for a wide variety of commercial, industrial, and military applications.

II. Major Problem

The major present problem Placido Engine Company is going through is that it started receiving complaints from its customers concerning corroded gearboxes on engines. The problem was significant and serious to the …show more content…

Perhaps Placido would have to find other suppliers that will meet the demands for a low cost, that would be an advantage for the company. b) Another alternative should be using the negotiation method in order to develop a “win-win” situation. A negotiating party would have to be applied, “When a long period of time is required to produce the items purchased” (p 375). In these circumstances, suitable economic price adjustment clauses must be negotiated. Opportunities for various improvements may develop, such as the new manufacturing methods, new packaging possibilities, substitute materials, new plant layouts, and new tools. Negotiation permits an examination and evaluation of all these potential improvements. Competitive bidding does not. The advantage would be assurance of a long-term business with the Company along with reasonable profit for the supplier and reasonable cost for the buyer. c) Special Legal Considerations would be another alternative for this issue. Inspection Rights, if a purchaser has not inspected the purchased material to ensure that it conforms to the terms of the contract, the law gives him or her a reasonable period of time to inspect the material after it is received. If the purchaser raises no objection to the material within a reasonable period of time, he or she is deemed to have accepted it. d) Rights of Rejection, a purchaser has the right to reject material that does

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