OPERATIONS MANAGEMENT IN THE SUPPLY CHAIN: DECISIONS & CASES (Mcgraw-hill Series Operations and Decision Sciences)
7th Edition
ISBN: 9780077835439
Author: Roger G Schroeder, M. Johnny Rungtusanatham, Susan Meyer Goldstein
Publisher: McGraw-Hill Education
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Chapter 17, Problem 10DQ
Summary Introduction
To determine: The examples for reverse auctions.
Introduction:
Outsourcing is the process where the firm hires another firm, which can handle the task in a better way than in-house or an expert who can perform the task better than the in-house experts.
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OPERATIONS MANAGEMENT IN THE SUPPLY CHAIN: DECISIONS & CASES (Mcgraw-hill Series Operations and Decision Sciences)
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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?arrow_forwardScenario 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_forwardDifferentiate between independent and dependent demand.arrow_forward
- A supply chain that must deal with high levels of both supply and demand uncertainty.arrow_forwardDescribe the concept of independent vs dependent demand. Give an example of each.arrow_forwardWhy would this cause a procurement professional to integrate with trucking or train companies more intensely? With the Mississippi River at its 8th-lowest water level on record, grounding risk has increased for barge operators,and multiple groundings have been reported on the Lower MississippiOn Tuesday, the U.S. Coast Guard relayed reports of new barge groundings near Stack Island, Mississippi andMemphis, Tennessee, and waterway closures are in effect around both sites. Coast Guard Sector Lower MississippiRiver has reported eight groundings in the past week due to low water levels. "Due to low water levels on the Lower Mississippi River, we have seen an increase in commercial vesselgroundings," said Capt. Eric Carrero, Director of Western Rivers and Waterways at Coast Guard District Eight. "Inresponse, the Coast Guard established a Marine Transportation System Recovery Unit with our federal, state, local,and maritime industry partners to facilitate safe navigation and the continued…arrow_forward
- Demand for products or services can be broken down into how many components and explain the components?arrow_forwardHow might purchasing policies and procedures differ as the dealerships purchase different types of service parts and materials (for example, lubricants versus genuine GM parts)?arrow_forwardIn purchasing an item, there are two conceptual dimensions, generally speaking, either product or service. Compare and contrast the two concepts in terms of similarity and difference. What kind of item can be an example, which includes both dimensions of product and service?arrow_forward
- A procurement system enables the firm to generate demand forecasts for a product and to develop sourcing and manufacturing plans for that product. [Sistem perolehan membolehkan syarikat menghasilkan ramalan permintaan untuk produk dan mengembangkan rancangan sumber dan pembuatan untuk produk tersebut.] Select one: O True O Falsearrow_forwardExplain how can a purchasing department influence the financial performance of a large manufacturer.arrow_forwardList and discuss potential supply chain modeling pitfalls to avoid.arrow_forward
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