3. Main Street Cinema is a single-screen movie theater in a residential area. MainStreet Cinema is a licensed exhibitor of Mega Pictures Distribution Company,meaning that it receives all its movies from and pays all rental fees to this largercorporation, as per the license agreement. Otherwise, Main Street Cinema is asmall business that spends a considerable amount of money each yearpurchasing a wide variety of products from suppliers. Last year's spend analysisrevealed the following: (Noteshaper Scenario #16)Purchasing CategoriesDaily Janitorial ServicesUpholstery and carpet cleaningSoft drinksPopcorn and CandyToilet Paper & liquid soap (bathroom)Annual Expenditure$83,000$28,000$25,000$33,000$750 The two contract services listed at the top of this table are particularly importantto Main Street Cinema in that they require Main Street to entrust its facility topersonnel sent by the other companies it hires for these services. Upholstery andcarpet cleaning, while only purchased four times a year, is particularly worrisometo Main Street Cinema, because the supplier of this service must work overnightto complete the cleaning, and any problems during that work can force MainStreet Cinema into closing the following business day and losing all salesrevenue.Develop a Supplier Positioning Matrix and place the appropriate purchasingcategories on it.

Supplies positioning refers to a business tool used for assessing the risk in the delivery or…

Answered: Develop a Supplier Positioning Matrix…

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

ChapterC: Cases

Section: Chapter Questions

Problem 5.2SA

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Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?
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A firm’s manager must decide whether to make or buy a certain item used in the production of vending machines. Making the item would involve annual lease costs of $150,000. Cost and volume estimates are as follows Make Buy Annual fixed cost $150,000 None Variable cost/unit $ 60 $ 80 Annual volume (units) 12,000 12,000 Given these numbers, should the firm buy or make this item? There is a possibility that volume could change in the future. At what volume would the manager be indifferent between making and buying?
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Develop a Supplier Positioning Matrix and place the appropriate purchasing categories on it.