Concept explainers
Case summary: CEO of company C concerned about the problem that has existed more than 20 years. Even the priors decision did not resolve the problem. One of the decision is to purchase new locomotives and renovate the repair shops bout it is inefficient. Customers experience poor service from company C. Availability of equipment and failure rate between mean time are low compared to other companies. So the company C is considering a new approach to the equipment problem. And the new approach is to lease locomotives from several sources. John vice president estimates that the company would save upto 5 milion annually by this new pproach. The new lease method call for the manufacturers doing the repair work to charge only for maintenance on the actual number of miles that a particular unit operates. The lease agrrement method will last ipto 15 years.
To determine: whether a decision of leasing is best or not.
Want to see the full answer?
Check out a sample textbook solutionChapter 6 Solutions
Transportation: A Global Supply Chain Perspective
- Scenario 4 Sharon Gillespie, a new buyer at Visionex, Inc., was reviewing quotations for a tooling contract submitted by four suppliers. She was evaluating the quotes based on price, target quality levels, and delivery lead time promises. As she was working, her manager, Dave Cox, entered her office. He asked how everything was progressing and if she needed any help. She mentioned she was reviewing quotations from suppliers for a tooling contract. Dave asked who the interested suppliers were and if she had made a decision. Sharon indicated that one supplier, Apex, appeared to fit exactly the requirements Visionex had specified in the proposal. Dave told her to keep up the good work. Later that day Dave again visited Sharons office. He stated that he had done some research on the suppliers and felt that another supplier, Micron, appeared to have the best track record with Visionex. He pointed out that Sharons first choice was a new supplier to Visionex and there was some risk involved with that choice. Dave indicated that it would please him greatly if she selected Micron for the contract. The next day Sharon was having lunch with another buyer, Mark Smith. She mentioned the conversation with Dave and said she honestly felt that Apex was the best choice. When Mark asked Sharon who Dave preferred, she answered, Micron. At that point Mark rolled his eyes and shook his head. Sharon asked what the body language was all about. Mark replied, Look, I know youre new but you should know this. I heard last week that Daves brother-in-law is a new part owner of Micron. I was wondering how soon it would be before he started steering business to that company. He is not the straightest character. Sharon was shocked. After a few moments, she announced that her original choice was still the best selection. At that point Mark reminded Sharon that she was replacing a terminated buyer who did not go along with one of Daves previous preferred suppliers. What does the Institute of Supply Management code of ethics say about financial conflicts of interest?arrow_forwardScenario 4 Sharon Gillespie, a new buyer at Visionex, Inc., was reviewing quotations for a tooling contract submitted by four suppliers. She was evaluating the quotes based on price, target quality levels, and delivery lead time promises. As she was working, her manager, Dave Cox, entered her office. He asked how everything was progressing and if she needed any help. She mentioned she was reviewing quotations from suppliers for a tooling contract. Dave asked who the interested suppliers were and if she had made a decision. Sharon indicated that one supplier, Apex, appeared to fit exactly the requirements Visionex had specified in the proposal. Dave told her to keep up the good work. Later that day Dave again visited Sharons office. He stated that he had done some research on the suppliers and felt that another supplier, Micron, appeared to have the best track record with Visionex. He pointed out that Sharons first choice was a new supplier to Visionex and there was some risk involved with that choice. Dave indicated that it would please him greatly if she selected Micron for the contract. The next day Sharon was having lunch with another buyer, Mark Smith. She mentioned the conversation with Dave and said she honestly felt that Apex was the best choice. When Mark asked Sharon who Dave preferred, she answered, Micron. At that point Mark rolled his eyes and shook his head. Sharon asked what the body language was all about. Mark replied, Look, I know youre new but you should know this. I heard last week that Daves brother-in-law is a new part owner of Micron. I was wondering how soon it would be before he started steering business to that company. He is not the straightest character. Sharon was shocked. After a few moments, she announced that her original choice was still the best selection. At that point Mark reminded Sharon that she was replacing a terminated buyer who did not go along with one of Daves previous preferred suppliers. Ethical decisions that affect a buyers ethical perspective usually involve the organizational environment, cultural environment, personal environment, and industry environment. Analyze this scenario using these four variables.arrow_forwardScenario 4 Sharon Gillespie, a new buyer at Visionex, Inc., was reviewing quotations for a tooling contract submitted by four suppliers. She was evaluating the quotes based on price, target quality levels, and delivery lead time promises. As she was working, her manager, Dave Cox, entered her office. He asked how everything was progressing and if she needed any help. She mentioned she was reviewing quotations from suppliers for a tooling contract. Dave asked who the interested suppliers were and if she had made a decision. Sharon indicated that one supplier, Apex, appeared to fit exactly the requirements Visionex had specified in the proposal. Dave told her to keep up the good work. Later that day Dave again visited Sharons office. He stated that he had done some research on the suppliers and felt that another supplier, Micron, appeared to have the best track record with Visionex. He pointed out that Sharons first choice was a new supplier to Visionex and there was some risk involved with that choice. Dave indicated that it would please him greatly if she selected Micron for the contract. The next day Sharon was having lunch with another buyer, Mark Smith. She mentioned the conversation with Dave and said she honestly felt that Apex was the best choice. When Mark asked Sharon who Dave preferred, she answered, Micron. At that point Mark rolled his eyes and shook his head. Sharon asked what the body language was all about. Mark replied, Look, I know youre new but you should know this. I heard last week that Daves brother-in-law is a new part owner of Micron. I was wondering how soon it would be before he started steering business to that company. He is not the straightest character. Sharon was shocked. After a few moments, she announced that her original choice was still the best selection. At that point Mark reminded Sharon that she was replacing a terminated buyer who did not go along with one of Daves previous preferred suppliers. What should Sharon do in this situation?arrow_forward
- 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_forwardUse the Scenario below to answer Question 3: CoolClothes Manufacturers is a large clothing manufacturing company based in Johannesburg, CoolClothes not only manufactures their own clothing line, they also distribute it to the various fashion outlets throughout the country. As the Head of Operations for CoolClothes, you have noticed a steady decline In demand over the last six months across all fashion outlets. Upon investigation, it has become apparent that the decline is as a result of customer dissatisfaction in the quality of the clothing found in stores. You are unsure of whether it is worth manufacturing at the same quantity or not given the decline in demand.arrow_forward
- Solve the following MIS problems with short brief answers. No MIS Problem Type Solution HERE 1 The Walt Disney Company offers a MagicBand to all customers vising their parks. The MagicBand is a wristband with an RFID chip tracks customer information and location . Disney claim they use it to provide a great customer experience. would you be concerned knowing your personal and location data is being tracked and monitored in real time? Why or why not. Some employees in a company were assigned a project that requires them to work with employees in another country and meet on regular basis to discuss ideas, talk and share documents. Which software would 2 recommend for this type of communication and why? As a Facebook user, you willingly consent that Facebook owns every bit and byte of data you post, and once you press submit, Facebook can do whatever it wants with your data. Do you agree or disagree that Facebook has the right to do whatever it wants with the 3 data? 4 Knowing how…arrow_forwardRubatex Corporation manufactures rubber and foam for a variety of products, including artificial turf housing and insulation, hockey helmet liners, scuba diving suits, sports sandals and mouse pads. The company was purchased by an investment firm called American industrial partners (AIP) that has so far earned only a 1 percent return on its investment. Obviously the company is having problems. Its sales are up but earnings are down. In the first three months after acquisition, the company lost $2 million on $68 million in sales. Understandably, AIP wants to know why and is demanding aggressive action. Employees at the Bedford, Virginia, plant say they know something’s wrong. The plant is hot and dirty and crumbling, and they are working harder to produce items of poorer quality. Fewer than 7 of 10 orders are shipped on time, and 2% of sales are returned as defective. Built in 1924, the plant sprawls over 14 buildings, with only the offices and lunchroom air-conditioned. Equipment is…arrow_forward11- Particular success factors are associated explicitly with e-government service provision, which are divided into two categories: service-oriented and function-oriented success factors. Select one: a. True b. Falsearrow_forward
- In order to prevent the Ebola virus and the MERS-CoV (Middle East Respiratory Syndrome Coronavirus) from entering the Philippines, airports and other entry points all over the country have been provided with digital thermo scanners to detect feverish persons coming in from countries affected by the two viruses. However, there is no guarantee that the country would be virus-free for a long time despite the state-of-the-art equipment that the authorities have been using. What do you think are the opportunities presented by this threatening situation?arrow_forwardThe use of lights are essential in our life especially at night. Many places can be dangerousif the lights are not function correctly. To date, many light monitoring systems have beendeveloped to monitor the condition of the lights. The system is not limited to monitor theperformance of lighting in public areas but it also useful for private use. Although traditionaltechniques such as Zigbee and Bluetooth have been applied to the light monitoring system,however, the system has a technical limitation, the cost of installation and maintenance ishigh and the use of them is not ideal in long distance communication especially in largearea.Your team were appointed as the developer to develop an autonomous lighting monitoringsystem for University. Your ultimate tasks are to prepare a completeproject management blueprints for the project. You were given six (6) months to completethe project with a budget of RM600, 000.00 to implement the plan. 1) Develop a strategy for scope validation and…arrow_forwardThe use of lights are essential in our life especially at night. Many places can be dangerousif the lights are not function correctly. To date, many light monitoring systems have beendeveloped to monitor the condition of the lights. The system is not limited to monitor theperformance of lighting in public areas but it also useful for private use. Although traditionaltechniques such as Zigbee and Bluetooth have been applied to the light monitoring system,however, the system has a technical limitation, the cost of installation and maintenance ishigh and the use of them is not ideal in long distance communication especially in largearea.Your team were appointed as the developer to develop an autonomous lighting monitoringsystem for University. Your ultimate tasks are to prepare a completeproject management blueprints for the project. You were given six (6) months to completethe project with a budget of RM600, 000.00 to implement the plan.\ 1) Develop a response strategy for one of the…arrow_forward
- Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage Learning