Problem-3:White & Becker Tools (W&B) requires 2,000 electric motors next month for its product line of weed trimmers. Eachmotor is composed of three components: a coil, a shaft, and housing. W&B has the capability to produce thesecomponents or purchase them from an outside vendor. The costs of producing them and purchasing them are shownin the following table.COMPONENTCoilShaftHousingPRODUCTIONCOST PER UNITFabrication 0.50.4MoldingInspection0.2$2.60$1.80$1.40The components that are produced by W&B must pass through three departments: fabrication, molding, andinspection. The number of hours each component requires in each department and the total number of hours availablenext month in each department are shown in the following table:0.20.7PURCHASECOST PER UNITDEPART- COIL SHAFT HOUSING AVAILABILITYMENT(HR.) (HR.)(HR.)(HR.)$3.12$2.16$1.680.60.30.43,0003,0001,800In order to determine the number of components that will be produced and the number that will be purchased, W&Bhas set the following goals, in rank order:Rank 1: The total costs to produce and purchase components next month should not exceed $14,000.Rank 2: Idle time in the fabrication department should be minimized.Rank 3: At least 200 coils should be purchased from the vendor next month.Determine the number of components produced and purchased next month, according to these ranked goals.

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White & Becker Tools (W&B) requires 2,000 electric motors next month for its product li motor is composed of three components: a coil, a shaft, and housing. W&B has the c components or purchase them from an outside vendor. The costs of producing them and p in the following table.

White & Becker Tools (W&B) requires 2,000 electric motors next month for its product li motor is composed of three components: a coil, a shaft, and housing. W&B has the c components or purchase them from an outside vendor. The costs of producing them and p in the following table.

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 5.1SC: Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing...

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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?
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