Amanda Pinkerton is a purchasing agent for an airconditioner manufacturer. Amanda is evaluating two potential suppliers of condensers for the AC production. "Best Condensers, LLC" quotes a price of $165 per condenser and guarantees highest quality and on time delivery. Another supplied, "Cheapest condensers, LLC" quotes a price of $135 per condenser and gives no other assurances.
You are the management accountant and Amanda needs your help to decide which supplier to buy from by having you prepare a comparison between the two supplies, as she knows her boss is likely to ignore factors without dollar estimates attached to them. Amanda gathers the following information to help you:
● Factory manufactures 2,000 air conditioners per year, being operated 250 days a year.
● Production time per day is 8 hours at a cost of $4,000 per hour to run the production line.
● Amanda estimates 20 hours of lost production time due to quality and delivery issues with supplier B
● Satisfied customers purchase, on average, three motorcycles during a lifetime.
● Satisfied customers recommend the product, on average, to 5 other people.
● Marketing estimates that using the seat from supplier B will result in 5 lost customers per year from repeat business and referrals.
● Average contribution margin per air conditioner is $5,000.
Estimate the costs of buying condensers from the cheaper supplier and briefly explain your reasoning. (Note: think creatively and make reasonable estimates; there is more than one correct answer.)
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Estimate the costs of buying condensers from the cheaper supplier and briefly explain your reasoning. (Note: think creatively and make reasonable estimates; there is more than one correct answer.)
Write down your analysis of this case on factors like the interests involved, context and power PACIFIC OIL COMPANY (A)* "Look, you asked for my advice, and I gave it to you," Frank Kelsey said. "If I were you, I wouldn't make any more concessions! I really don't think you ought to agree to their last demand! But you're the one who has to live with the contract, not me!" Static on the transatlantic telephone connection obscured Jean Fontaine's reply....
Write down your analysis of this case on factors like 1. the negotiation process, strategy and tactics PACIFIC OIL COMPANY (A)* "Look, you asked for my advice, and I gave it to you," Frank Kelsey said. "If I were you, I wouldn't make any more concessions! I really don't think you ought to agree to their last demand! But you're the one who has to live with the contract, not me!" Static on the transatlantic telephone connection obscured Jean Fontaine's...