CORE Exam Dumps : Supply Management Core Exam

Calculate Total Cost per Supplier: This includes the unit price and shipping costs.

Supplier A: Unit cost is $0.69. Shipping cost is $2000 per 10,000 units.

Total cost per unit: $0.69 + ($2000/10,000) = $0.69 + $0.20 = $0.71 per unit.

Supplier B: Unit cost is $0.71. Shipping cost is $1500 per 10,000 units.

Total cost per unit: $0.71 + ($1500/10,000) = $0.71 + $0.15 = $0.715 per unit.

Compare Landed Prices: The total cost per unit for Supplier A is $0.71, and for Supplier B, it is $0.715.

Decision: Supplier A offers the lower landed price at $0.71 per unit compared to Supplier B’s $0.715 per unit.

References

Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2016). Purchasing and Supply Chain Management. Cengage Learning.

Christopher, M. (2016). Logistics & Supply Chain Management. Pearson.

Current Situation: Supplier A has provided reliable and high-quality components to FGH, Inc. for many years.

Price Increase Notification: Supplier A informs FGH of a significant anticipated price increase due to building a new production facility.

Negotiation Directive: FGH's supply manager is directed to negotiate a new contract only if Supplier A agrees to maintain current pricing.

Preparation for Negotiation: Determining if the parts can be produced elsewhere provides the supply manager with leverage in negotiations. This research will show whether FGH has alternative sources or if Supplier A holds a monopoly on the components.

Negotiation Leverage: Knowing that there are alternative suppliers can strengthen FGH's negotiating position, possibly leading to more favorable terms or at least a better understanding of the market.

References

ISM. (n.d.). Strategic Sourcing and Supplier Selection.

CIPS. (n.d.). Effective Negotiation Strategies in Procurement.

Sales Representative’s Promise: The sales representative from XYZ Company provided documentation that the product would meet or exceed ABC's specifications.

Express Warranty: An express warranty is created when a seller makes a promise or provides assurance that a product will meet certain standards or specifications.

Non-Conforming Goods: Upon inspection, the product did not meet the required specifications and could not be used for its intended purpose.

Buyer's Rights: Under the Uniform Commercial Code (UCC) and similar laws, the buyer has the right to return non-conforming goods and seek a full refund when an express warranty has been breached.

Conclusion: ABC is entitled to return the product and receive a full refund due to the breach of the express warranty.

References

UCC (Uniform Commercial Code). (n.d.). Article 2 - Sales.

ISM. (n.d.). Managing Warranties and Product Non-Conformance.