Case summary:
IB Company asked two other companies to bid on additional 80 units for a computer product. The companies submitted the figures and the cost breakdown. One of the companies SM indicated displeasure over the inflation possibility in material costs.
They had another concern regarding the large requirement of subcontracting and overtime that will be needed to complete the requested deliver by IB Company. They called upon further meetings to discuss the cost estimations as they have seriously underestimated the cost requirements.
To determine: The advantages and disadvantages for IB and SM Company in this approach.
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