Case Study #1 - Lambert Tamin 2/07/2011 Introduction to...

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Lambert Tamin 2/07/2011 Introduction to Supply Chain Management Professor Murphy Case Study #1 It is pretty evident that in our society, lowering of cost plays a major role in the majority of consumer’s lives due to a need to be efficient and effective, or in other words, “economically sound.” One of the most common ways organizations lower cost of materials are by building long-term, exclusive relationships, which most of the time leads to discounts on products from the supplier over time. In many cases, organizations are given the choice of either single sourcing their products, or acquiring products from multiple sources, each providing their respective benefits. Organizations may partake in establishing a single supplier in attempts to establish a good relationship in order to lower costs, receive less variability in the quality of their products, and lower costs due to discounts, etc. Organizations may choose multiple sources to receive their products because a single source may not have the capacity to supply all their products, it spreads the risk of supply interruption, it creates competition, and because it gives organizations the opportunity to obtain a more comprehensive view of various types of businesses. The legal issues that are involved pertain to the terms of the “Special Conditions Agreement” by the Nevada Office Supply Company. By law, multiple organizations are allowed to receive the same contract from a provider in terms of making an agreement resulting in the lowering of costs. As part of the original agreement between the University of Las Vegas and the Nevada Office Supply Company, an incentive the Nevada Office Supply Company provided in order for them to agree to the terms of the agreement was that the University of Las Vegas would receive a two percent rebate from all combined purchases by them and other educational entities if their combined purchases exceeded 1,000,000 per year(pg. 132). Another condition of the partnering agreement is that the University of Las Vegas would try and convince other educational institutions throughout the state to tie on to this partnering agreement.
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However, according to the Special Conditions agreement, NOSCO does not want the other educational institutions to know about the existence of the 2% rebate. In the state of Nevada, this condition is in direct violation of the previous law stated which allows multiple educational institutions to enter the same or
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Case Study #1 - Lambert Tamin 2/07/2011 Introduction to...

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