Loren Inc. case
Brent Miller, the raw material buyer at Loren Inc is preparing for the company’s annual hexonic acid requirement, on June 15. Four suppliers have submitted substantially different bids for this contract which begins in August 1. Loren Inc. is the Canadian subsidiary of a larger chemical company, and have an excellent reputation for quality products and had substantial in total sale. Brent has been appointed raw material buyer, reporting to the manager of chemicals buying group, and the hexonic acid contract will need to be approved by his immediate supervisor and the director of department.
Brent know that some of the company’s policies and procedures should ...view middle of the document...
On May 14, a hexonic acid inquiry was sent to four suppliers, Alfo and Canchem, and 2 other American companies. The deadline for bids was June 7. Brent met with Mr. Baker, the sales representative form Allfo on April 20. He said that they have unfilled capacity at their new plant were eager to receive an indication of Loren’s future hexonic acid requirement.
During another phone call with Mr. Wallance, sales representative of Michigan chemical, Brent was informed that they will be represented by their distributor in Canada Carter Chemicals Ltd. Michigan chemicals has supplied close to 99% of its commitment to the Loren US, and had a good reputation with them. Brent told MR. Wallance that the current suppliers held the advantage and they will need to offer better value in order for Loren to consider them. Their quoted price was 1268 $ per ton.
Mr Alder, sales representative of Canchem brought the quotation from his company in person and presented term to Brent. They have offered the same price as what Lo ren is currently paying for delivered Canchem material(1384). Brent was disappointed by this and said he was expecting a more aggressive quote.
Two representatives from Amchen chemical (American supplier) delivered their quotation, and presented it to Brent. They have just recently expnded their plant, and had the ability to Loren’s requirements. Their quote was 1204 per ton, which was dependent on the specific volume allocated to Amchen, and it was lower for the higher...