(a)
Interpretation:
Thecategory of spending that best fits the description of strategic critical pursing in the supplier positioning model.
Concept Introduction:
The support in prioritizing of spend and building the strategy to get use figures given below.
(b)
Interpretation:
The category of spending that best fits the description of strategic security pursing in the supplier positioning model.
Concept Introduction:
The support in prioritizing of spending and building the strategy to get use figures given below.
(c)
Interpretation:
The two categories of spending that best fits the description of tactical profit purchasing in the supplier positioning model.
Concept Introduction:
Support in prioritizing of spend and building the strategy to get use figures given below.
(d)
Interpretation:
The category of spending that best fits the description of tactical acquisition purchasing in the supplier positioning model.
Concept Introduction:
The Support in prioritizing of spend and building the strategy to get use figures given below.
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Practical Operations Management
- 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?arrow_forwardWhat types of information should Starwood exchange with its bed linens and terrycloth supplier? What does Starwood risk by sharing too much information?arrow_forwardBelletricity Inc., a medium electronic circuit board manufacturer in the US, is a long-term supplier to Morden Equipment (ME). ME is Belletricity’s only client. Every year, Belletricity sells around 5 million circuit boards to ME, which occupies Belletricity’s full production capacity. In 2012, ME informed Belletricity that due to business expansion, ME would increase the purchase from 5 million to 15 million starting from 2013. Belletricity has been selling circuit boards at the unit rate of USD 0.8 to ME so far. Due to the future increase of the buying volume, ME therefore asked Belletricity a price cut to USD 0.6 each. After negotiation, ME agreed to buy from Belletricity at the price of USD 1.00 starting 2013, for three years consecutively, till 2015. a) What was the rationale behind that ME agreed to pay a higher price to buy from Belletricity for the next three years? b) Why could Belletricity successfully persuade ME to accept her requested price?arrow_forward
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