Portland Bus Essay

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Case 4-3: Portland Bus Company Name: Xiangying Yao Group: B Date: 02/10/2011 ------------------------------------------------- Situation: * Richard Kaplan is a Buyer of Materials Department at Portland Bus Company. * Reports to Director of Material Department * Be responsible for sourcing fabricated metal components * First use of reverse auctions assisted by Laura Henning, business consultant for Bothe US operations. * approximately 290 components * involving 7 suppliers * Current situation * Total annual purchases were approximately $250, and about $60 million to be sourced through Materials Department * 10 suppliers were responsible for 290 components in 3 fabricated metal parts, representing about $2 million annual spend BASIC ISSUES 1. Purchasing for a service organization. 2. Supplier selection and splitting of business. 3. The purchase of services. Tasks: * What does Richard do? * Four current suppliers were not in this plan regarding past performance * Intend to include a new supplier, Neelin Mfg. Inc., in the online bidding event * Group 290 components into 21 packages * What are alternatives? * The type of auction to be used * The policy for selecting suppliers SUGGESTED QUESTIONS FOR DISCUSSION 1. What importance is the suppliers’ selection? 2. How would you do a cost analysis for purchasing metal parts? 3. How would you evaluate a supplier’s performance during purchasing? 4. How to make a decision about switching suppliers? 5. To what extent prices could be negotiated following the auction 6. To what extent should PBC take into consideration long-term supply relationships when making final sourcing decision from the reverse auction? Actions: * Preparation * Meeting with Laura, finalize the schedule for the

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