Case Study Loren

902 Words4 Pages
Company Background Loren (Canada) Inc. sells chemical products to consumers and industries. Brent Miller has been just recently appointed raw materials buyer and reports to the Director of Purchasing. Total Canadian sales in the past have been in the approximate sum of $800 million. Raw Materials and packaging cost in the past were approximately 50% of sales. Purchasing Loren (Canada) Inc. has found that they have an increase in the sales of Hexonic Acid. The company uses two suppliers for this product: Canchem, which supplies 60% of Hexonic Acid and Alfo that supplies 40% of Hexonic Acid. Alfo and Canchem have increased their supply of Hexonic Acid. The two suppliers have provided high quality and service to Loren (Canada) Inc. over the past years. Alfo has met all supply demands to Loren (Canada) Inc. for Hexonic Acid in the past, and can meet all supply demands of Hexonic Acid in the future. Canchem has met all supply demands in the past year but is unsure about meeting all of Loren (Canada) Inc. demands to supply Hexonic Acid in the future. The raw materials buyer has requested bids from four suppliers that include Alfo and Canchem for new bids on supplying Hexonic Acid. Suppliers Data Alfo • Alfo price for Hexonic Acid is $1,296.00/ton. • Alfo contract states that there will be no minimum order required for Hexonic Acid. • The contract is for a minimum period of 1 year. • Alfo offered a price protection for 90 days. • Alfo has upgraded their new plant to meet Loren Inc. demands in Hexonic Acid. • The newly upgraded plant is located in Quebec City. • Alfo will need a notice 15 days for all orders of Hexonic Acid. • European markets have a lower price on Hexonic Acid. • The cost of duty and freight to bring in Hexonic Acid would not offer any savings on ordering from Europe. • Public fact that users of Hexonic Acid is slowing

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