Renuka Machines Manufacturing Corporation Renuka Thomas, president of Renuka Machines Manufacturing Corporation (RMMC), is concerned about company's choice of supplier for cleaning brushes, which are used in the company's data processing equipment. Renuka occasionally plays Tennis with Sheela George, President of George Machine Company (GMC), one of the Company's suppliers of cleaning brushes. Recently, Sheela complained to Renuka that her company has been having difficulty in getting traditional share of Renuka’s brush business. On the last buy, Sheela's company failed to get any business, even though Sheela believed she was the low bidder. Renuka tells Sheela that normally she does not get into the details of procurement, but she promises to ask her purchasing manager Dannis Chako to investigate. The next day morning Renuka calls Dannis Chako and tells him of Sheela’s complaint. He said, he does not want to influence the company's procurement policies, but he does not feel that Renuka should investigate to make sure that Sheela's firm was treated fairly. Purchasing Manager Dannis discovers that Sheela George Machine Company was indeed low bidder on the last buying. Quotation for on order of 20,000 units were as under : Sheela George Machine Company Rs. 2.22 Data Matics Electronics Company Rs. 2.23 Royal Tools and Machine Company Rs. 2.25 Royal and Data Matics each got orders for 10,000 pieces. Royal has done considerable development work on brushes, while Sheela and Data Matics have done very little. The quality and delivery records of the three suppliers on the last ten orders for the brush are shown below. Renuka Machine's mfg. quality control development has set an acceptable quality level of 3 percent on the brush: 2 Supplier Quantity Quality Ordered Delivery Defective Royal 4,000 122 One week early Data Matics 4,000 92 One week late Sheela 3,000 120 On time Sheela 6,000 162 Two week late Royal 4,000 38 On time Data Matics 5,000 29 One week early Sheela 1000 pieces on time, 1000 pieces four weeks late 2,000 88 Data Matics 6,000 98 Two weeks late Royal 4,000 45 One week early Sheela 5,000 162 One week late Questions : Is Dannic Chaco justified in eliminating Sheela Machine Company as a supplier of brushes? b) In what respect is the complaint from Sheela Machine Company Justified? c) Prepare a report for Renuka Thomas explaining the decision to eliminate Sheela Machine Company as a supplier, use quantitative data as much as possible to support your answer? а)

Renuka Machines Manufacturing Corporation Renuka Thomas, president of Renuka Machines Manufacturing Corporation (RMMC), is concerned about company's choice of supplier for cleaning brushes, which are used in the company's data processing equipment. Renuka occasionally plays Tennis with Sheela George, President of George Machine Company (GMC), one of the Company's suppliers of cleaning brushes. Recently, Sheela complained to Renuka that her company has been having difficulty in getting traditional share of Renuka’s brush business. On the last buy, Sheela's company failed to get any business, even though Sheela believed she was the low bidder. Renuka tells Sheela that normally she does not get into the details of procurement, but she promises to ask her purchasing manager Dannis Chako to investigate. The next day morning Renuka calls Dannis Chako and tells him of Sheela’s complaint. He said, he does not want to influence the company's procurement policies, but he does not feel that Renuka should investigate to make sure that Sheela's firm was treated fairly. Purchasing Manager Dannis discovers that Sheela George Machine Company was indeed low bidder on the last buying. Quotation for on order of 20,000 units were as under : Sheela George Machine Company Rs. 2.22 Data Matics Electronics Company Rs. 2.23 Royal Tools and Machine Company Rs. 2.25 Royal and Data Matics each got orders for 10,000 pieces. Royal has done considerable development work on brushes, while Sheela and Data Matics have done very little. The quality and delivery records of the three suppliers on the last ten orders for the brush are shown below. Renuka Machine's mfg. quality control development has set an acceptable quality level of 3 percent on the brush: 2 Supplier Quantity Quality Ordered Delivery Defective Royal 4,000 122 One week early Data Matics 4,000 92 One week late Sheela 3,000 120 On time Sheela 6,000 162 Two week late Royal 4,000 38 On time Data Matics 5,000 29 One week early Sheela 1000 pieces on time, 1000 pieces four weeks late 2,000 88 Data Matics 6,000 98 Two weeks late Royal 4,000 45 One week early Sheela 5,000 162 One week late Questions : Is Dannic Chaco justified in eliminating Sheela Machine Company as a supplier of brushes? b) In what respect is the complaint from Sheela Machine Company Justified? c) Prepare a report for Renuka Thomas explaining the decision to eliminate Sheela Machine Company as a supplier, use quantitative data as much as possible to support your answer? а)

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 5.1SC: Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing...

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