Supply Management Examination Paper

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THE UNIVERSITY OF HONG KONG
M.SC.(ENG.) EXAMINATIONS
SUPPLY MANAGEMENT (1ELM6046)
December 20, 2011

6:30 p.m. - 8:30 p.m.

Answer THREE questions ONLY. Question ONE is Compulsory. Total Marks: 100

Use of Electronic Calculators:
"Only approved calculators as announced by the Examinations Secretary can be used in this examination. It is candidates' responsibility to ensure that their calculator operates satisfactorily, and candidates must record the name and type of the calculator used on the front page of the examination script."

Question 1 (Compulsory) (40 marks)
Lily Pun, supply manager for King's Way College (KWC), issued an Invitation to Bid covering furnishing and installing metal lockers in the men's gym. Three responsive bids were received from reputable suppliers, ranging from $82,000 to $95,000. There was no public bid opening.

Lily was concerned that Lock Manufacturing Company, which had done most of the other locker jobs for KWC, failed to bid. Expecting that Lock would have been the low bidder, Lily decided to find out what happened. Upon talking to Lock's sales manager, she learned that the bid request had been assigned to a new employee who had misplaced it and missed the closing date. Since Lily felt that Lock would have provided the winning bid—and certainly, any savings would help KWC's current tight budget situation—she decided to declare all the bid prices unreasonable, cancel all bids, and re-bid the job. On the second round of bidding, a low bid of $77,000 was submitted by Lock. Lily was delighted that she had made the right decision, and proceeded to make the award to Lock. (a)

Did Lily do the right thing? Was it ethical? Should she be commended for saving (10 marks)
$5,000?

(b)

Would it have made any difference if the original bid opening had been public? (10 marks)

(c)

How might this look to the original bidders? Give examples to support your answer. (10 marks)

(d)

Discuss any similar cases happened...
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