Southeastern University

In: Business and Management

Submitted By xgzd111
Words 817
Pages 4
Situation:
Heather Sloman is a buyer in the purchasing department of Southeastern University
Reports to Glen Meredith, senior buyer of computer and business products
A folding machine was purchased by Walter Charbonneau, manager of of the university registrar’s office
All university purchases are required to follow university purchasing policies:
Submit a purchase request to purchasing department
Authority and approval will be checked and additional information (e.g. tax and duty status, product classification, supplier status, etc.) will be added
At least two written quotations for purchases in excess of $7,500 and a minimum of three quotations for purchase amount over $15,000
A buyer prepares the request for quotation form (RFQ) to approved suppliers in order to get written quotations
Any RFQs in excess of $100,000 should be posted on the internet
Current Situation:
Walter purchased the machine directly from an unapproved supplier, at a cost of $14,000
Walter didn’t comply with university purchasing policies
The machine just arrived and have not been installed yet
Three approved suppliers offer the quotes of $10,000, $11,000, and $15,000 for similar equipment. The $15,000 one includes one year of free service.

Basic Issues:
About 275 contracts per year were signed with suppliers without prior approval
Employees ignore university purchasing policies and place order with supplier directly
Some suppliers are not on the list of approved suppliers
The price, time, penalty, service, quality trade-off
Purchasing for a public institution
Treatment of purchases that violated university purchasing policies

Tasks:
How to deal with the machine?
Keep the machine and pay the supplier
Return the machine and pay a cancellation penalty
Negotiate with the supplier to get a lower price
How to prevent similar situation from happening again?
Figure…...

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