Running head: Supply Management Course Case Studies
Case Study #1 – Krause Corporation
1. Should Steve recommend buying the pipe or making it?
Steve could go forward as planned and make the steel piping in house to save money by using the lowest cost lowest acceptable quality steel. This would be risky since the material would inferior and also the risk of toxic fumes being released due to bad welding etc. Buying the pipe already formed and of better quality would be the second option. In house machines did not provide the proper ability to make 20 foot sections of piping. This causes more seams to be welded and ...view middle of the document...
I would hold the vendor accountable on a cost plus basis until the original agreed on quality was established.
Case Study #3 – Crossing the Border
1. Identify and discuss the key issues in the case.
Some of the key issues include the truckers strike. Another issue is the corrupt actions of the customs agents trying to bribe the truckers for money. The maquiladora is not autonomous while TAI is. This causes issues such as loss of control, loss of client focus, lack of clarity, lack of cost control, and ineffective management. Other issues include customs officials using tougher tactics to coerce payments from bribes and also causing undue delays in delivery times. Being that such corruption was an ongoing issue I would suggest finding another supplier for the short-term and negotiating new deals with alternate suppliers for the long term. Another option that may be more expensive than trucking would be airlift delivery. This would help deliveries for just in time requests. However, this may or may not help with the corruption that exists. Another option would be to negotiate pickup by the maquiladora at the border which could prevent longer delivery times and have local national representation at the border.
Case Study #4 – Futronics Incorporated
1. Assume you are Steve Hassell. Prepare an analysis and report on this issue for presentation at the next program meeting.
Advantages of procuring external services:
1. The company could save about 6% on about 90% of its procurements by going externally. Savings could be around $49,000 annually if we calculate $900,000 x .90 x .06 = $48,600).
2. Going external would allow the store to get rid of its internal inventory. If this happens about $42,000 could be saved $140,000 x .30 = $42,000 per year.