Case study 12-1 - Case 12-1 Loren Inc Name Xinhong He Lisi...

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Case 12-1: Loren Inc. Name: Xinhong He, Lisi Xu, Ailun Zhang, Qifeng Xu, Shangjie Shen Group: Fairy Tail Date: 11/08/2011 Situation: Brent Miller is the raw material buyer at Loren Inc. O Talk with representatives from four suppliers about raw material quotations O Discuss situations with his superior, Mr. Williams O Make recommendation for Loren’s annual hexonic acid requirements Two more companies, Carter Chemical and American Chemical, offered their quotations O Carter Chemical - $1,268/ton, min.750 tons, with min. 1 year O American Chemical - $1,204, min. 1,050 tons; $1,192/ton, min. 2,250 tons, with min. 1 year Loren expected to use approximately 3,000 tons of hexonic acid in the following year O Requirements for the past year amounted to 2,750 tons and had been supplied by Canchem and Alfo at 60 and 40 percent, with $1,384/ton and $1,296/ton, respectively A single – bid policy established over the years O Suppliers should quote their best possible offer on their first and only quote, and all suppliers should be willing to live with the consequences of their bid Current situation O Loren (Canada) was the Canadian subsidiary of a larger international chemical company O Total Canadian sales were approximately $800 million and after-tax profits were $40 million. Raw material and packaging costs were about 50 percent of sales
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This note was uploaded on 12/11/2011 for the course OPRE 6371 taught by Professor Jimhogan during the Fall '11 term at University of Texas at Dallas, Richardson.

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Case study 12-1 - Case 12-1 Loren Inc Name Xinhong He Lisi...

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