You have just started to work in the purchasing office of a major pharmaceutical firm. The purchasing manager has asked you to assist in writing an RFP for a major purchase. The manager gives you a sheet detailing the specifications for the RFP. While reading the specifications, you realize that they have been written to be extremely favorable to one bidder. How should you handle this situation?

You have just started to work in the purchasing office of a major pharmaceutical firm. The purchasing manager has asked you to assist in writing an RFP for a major purchase. The manager gives you a sheet detailing the specifications for the RFP. While reading the specifications, you realize that they have been written to be extremely favorable to one bidder. How should you handle this situation?

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 5.1SA

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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. Is Ben Gibson acting legally? Is he acting ethically? Why or why not?
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?
A document used to solicit bids from interested and qualified suppliers for goods and services that the organization needs to obtain is called a “rfp” request for approval, true or false?
As a purchasing agent for a local solar company at NYC, you have been asked to analyze the bids for 200 polished disks used in solar panels. These bids have been submitted by three suppliers: Thailand Polishing (Thailand), India Shine (India), and Sacramento Glow (California). Thailand Polishing has submitted a bid of 2,000 baht. India Shine has submitted a bid of 2,000 rupees. Sacramento Glow has submitted a bid of $200. You check with your local bank and find that $1 = 10 baht and $1 = 8 rupees. Which company should you choose?
As a purchasing agent for a local solar company at NYC, you have been asked to analyze the bids for 200 polished disks used in solar panels. These bids have been submitted by three suppliers: Thailand Polishing (Thailand), India Shine (India), and Sacramento Glow (California). Thailand Polishing has submitted a bid of 2,000 baht. India Shine has submitted a bid of 2,000 rupees. Sacramento Glow has submitted a bid of $200. You check with your local bank and find that $1 = 10 baht and $1 = 8 rupees. If there is a 30% import tax, which firm should you then choose?
“Did the Austin wedding contract you were working on go out yet?” asked Tonya Roberts, the executive director of the downtown convention center operated by the city of Springdale. “Yes, I mailed it to them yesterday after we talked about it,” replied Lara, the Center’s DOSM and revenue manager for space rental. “Why do you ask?” “I just got off the phone with the mayor’s office. They want to hold a big fundraiser for his reelection campaign in the ballroom the same night the Austin wedding wanted to reserve it. The wedding was for 200 people right?” continued Tonya. “That’s right. 200 people at about $150 a head; it’s a nice piece of business. About $30,000,” said Lara. “Well the mayor expects 1,000 people, at $100 per person. And don’t forget, he’s the boss. We can’t hold both events. I need you to call the Austins and tell them you made a mistake. Tell them the room is already booked that night. They’ll need to find another space.” What would you advise Lara to do if she asked you…
Attached is an image of the Converse Chuck Taylor All Star Sneaker. It sells for approximately R1200 andcan be purchased at retailers like, Edgars, Sport Scene, Total sports, Superbalist and other sneakeroutlets. Q.1 - Is the Converse Chuck Taylor All Star Sneaker a consumer product or an Industrial product? Q.2 - A product is said to have 5 layers: Core, Tangible, Augmented, potential product and product image. Provide an example for the following layers in relation to the Converse Chuck Taylor All Star Sneaker.• Core• Tangible• Product image Q.3 - Converse would like to expand their product mix by adding new product lines. Should they use related or unrelated diversification. Choose one and why
Suppose that a firm has the option to make or buy a part. Its annual requirement is 11,000 units. A supplier is able to supply the part at $6 per unit. The firm estimates that it costs $800 to prepare the contract with the supplier. To make the part, the firm must invest $29,000 in equipment, and the firm estimates that it costs $3 per unit to make the part. COSTS MAKE OPTION BUY OPTION Fixed Cost $29,000 $800 Variable Cost $3 $6 Annual Requirement = 11,000 units 1. What is the break-even point? Round your answer to the nearest whole number. 2. What is the total cost at the break-even point? Round your answer to the nearest dollar. 3. What is the total cost for the make option? Round your answer to the nearest dollar.
Two competitors have the cost structure shown below. Which of the following statements are true Firm A Firm B Product 1 Units 500 200 Total costs (P1) $50,000 $18,000 Product 2 Units 500 1200 Total costs (P2) $100,000 $144,000 Total costs (P1 + P2) $150,000 $162,000 A. Firm A should lower its price on Product 2 B. Firm B is the low-cost producer. C. Firm B should lower its price on Product 1 and Product 2 D. Firm A is the low-cost producer E. Both A and B are true
As a supply chain manager, would you rather have a supplier with a five days average lead time with a plus or minus three-day variance or supplier with a ten-day lead time that was plus or minus one day in its delivery?
If a product in question has an insignificant cost, it might not be worth the trouble to trace the cost of that item to a particular cost center, and that item would be considered indirect. If the cost of tracing the cost of that item is high in relation to the benefits received from tracing it, the item would likely be considered as indirect material. If the design of the manufacturing process easily permits all the items to be traced to a single type of cost center, then it would be easy for a company to consider that material to be direct. Overall, the direct/indirect classification is decided on a cost/benefit basis. In your response to this discussion, state why is it possible that a raw material such as glue might be considered as an indirect material for one furniture manufacturer and as a direct material for another furniture manufacture? Also for this discussion, what are the differences between direct costs and indirect costs? Give an example of each.
You are the buyer for a major U.S. health care company. As buyer, your job is to procure and buy parts for the production of X-Ray machines. The buyer from your sister plant in Paris, France has contacted you to supply them with 5 center sections, (a major component used in the X-Ray tube), because they will run out of these parts within 3 days. The center section is procured from a single source supplier in England, weighs approximately 40 pounds, is made of lead and has a 6-week lead time, (the time your supplier requires to manufacture the center section). Based on this criterion, answer the following questions: What mode of transportation is appropriate for shipping this part to Paris, France? What carrier will you use? Which carrier offers the best value?