Wolf Motors Essay

2046 Words9 Pages
Chapter 11: Wolf Motors* A. Synopsis Wolf Motors has just expanded its network of auto dealerships to include its first auto supermarket where three different makes of cars are sold at the same facility. John Wolf, the president and owner of the dealership, has identified three factors that have contributed to the success of the dealerships: volume, “one price-lowest price” concept of pricing, and after-the-sale service to the cars sold. Focusing on the service aspect, three components are critical to providing quality after-the-sale service: well-trained technicians, the latest equipment technologies, and an adequate supply of service parts and materials. Presently each dealership is responsible for ordering and managing its inventory of parts and service materials. The recent growth has brought with it both space and financial resource constraints. John is now wondering what, if anything, can be done with respect to the purchasing of service parts and materials that would help address some of these concerns. B. Purpose This case provides students with the opportunity to investigate the purchasing function of an organization in the service sector. Students begin to see that the effective management of materials is not only essential in manufacturing environments but is also critical in supporting the delivery of quality services. Students are confronted by a number of issues as they are asked to recommend a suitable structure for the purchasing function. Included among them are the following: 1. Given the growth in the number of dealerships in the network, should the purchasing function be centralized to take advantage of certain economics of scale, or should it remain decentralized in each separate dealership? 2. Given the different categories of service parts that are purchased, supplier management issues are raised. Some parts may be more appropriately
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