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Erica Carson

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Submitted By dinesh711
Words 601
Pages 3
Situation:
• Erica Carson is PM for Wesbank, a financial institution (note: You are Erica) o Reports to VP Supply
• Unsolicited bid from Art Evans, Sales Rep. Killoran Inc. o 10% reduction on printing and mailing of checks o not current supplier
• Westbank provides free checks at a cost of $8M per year
• Current situation – 50% split suppliers, last 5 years o Supplier A prints and mails 50% checks, renewed contract 8 months ago o Supplier B prints and mails 50% checks, contract expires in 4 months o Each 2 year contract, good quality and service o Costs studied one year ago, determined pricing was fair BASIC ISSUES; (note - tie to elements from textbook)

1. Purchasing for a service organization.
2. The price, quality, delivery, service trade-off.
3. Supplier selection and splitting of business.
4. The purchase of services.
5. Treatment of unsolicited proposals from suppliers

Tasks:
• Ray Soles should ensure the supply of Marconil ,a new high tech raw material for air filtration system.
• As he has learned that, the raw materials are by products from industrial process and prices are pretty much stable.
• Look for long term contracts
• What does Erica do? o Does Erica consider the bid? 10% savings = $800M o Status quo
• What are alternatives? Need to weigh alternatives. o Complete cost-benefit analysis o Are checks really needed? o What is core competency of bank? o What is business imperative with checks?
• What is company / VP Supply policy on unsolicited bids?
• Does this bid and subsequent action fit business goals and objectives?

SUGGESTED QUESTIONS FOR DISCUSSION;

1. What importance is the check printing to the bank?
2. How would you do a cost analysis on a check printing order?
3. How would you evaluate a supplier of check printing for this bank?
4. How many suppliers are desirable for check printing?
5.

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