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Southeaster

In: Business and Management

Submitted By gdnchg
Words 339
Pages 2
Background:
Southeastern University is one of Florida’s largest universities with total enrollment exceeding 25,000 students. The costs associated with operating a school of Southeastern’s size can be significant unless costs overruns are minimized. To keep costs as low as possible, the school’s purchasing department strives to realize cost savings through its annual purchases of goods and services totaling $75 million a year. To achieve this objective, Purchasing works with a list of preferred suppliers heavily weighted on selecting those who provided the lowest costs. Judy Sloman, a buyer at the university, was recently informed by senior purchaser Glen Meridith that a purchase for a $ 14,000 automatic folding machine was made by a staff member from the registrar’s office from an unapproved supplier. Due to the high volume of students and applicants every year, the office of the registrar employs 50-60 full-time and temporary staff to send out 160,000 pieces of mail annually. Thus, the automatic folding machine was purchased to eliminate some of the manual work to fold envelopes. The purchase however, was made by bypassing the protocol of obtaining prior approval from the purchasing department, and the requirement of soliciting quotes from the school’s list of preferred suppliers. As a consequence, Glen Meridith requested a meeting with Judy to discuss the matter and how it could be avoided in the future.

Key Issues:
• Immediate issue: Judy needs to consider what to say to Glen about the matter and provide recommendations on how to avoid similar occurrences in the future.
• Ongoing issue: It is university policy that approval is required from the school’s Purchasing department prior to signing contracts with suppliers for major purchases. Despite this requirement, there have been ongoing instances where purchases have been made without Purchasing’s approval.

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