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AEREN FOUNDATION

REG. NO. F/11724

AN ISO 9001 : 2008 CERTIFIED INTERNATIONAL B-SCHOOL
Subject:- Materials Management
Total marks 80
Group A
Case 1

(10 Marks)

Renuka Machines Manufacturing Corporation
(A case on vender rating in material management)

Renuka Thomas, President of Renuka Machines Manufacturing Corporation (RMMC), is concerned about company’s choice of suppliers for cleaning brushes, which are used in the company’s data processing equipment. Renuka occasionally plays tennis with Sheela George, President of George Machine Company (GMC), one of the company’s suppliers of cleaning brushes.

Recently, Sheela complained to Renuka that her company has been having difficulty in getting the traditional share of Renuka’s business. On the last buy, Sheela’s company failed to get any business, even thoug h Sheela believed she was the lowest bidder. Renuka tells Sheela that normally she does not get into the details of procurement, but she promises to ask her Purchasing Manager, Dannis Chako to investigate. The next day morning, Renuka calls Dannis Chako and tells him of Sheela’s complaint. He said (says ), that he does not want to influence the company’s procurement policies, but he does not feel that Renuka shou ld investigate to make sure that Sheela’s firm was treated fairly. Purchasing Manager, Dannis discovers that George Machine Company was indeed t he lowest bidder on the last buying. Quotations for an order of 20,000 units were as under:

George Machine Company
Data Matics Electronics Company
Royal Tools and Machine Company

Rs 2.22
Rs 2.23
Rs 2.25

Royal and Data Matics each got order for 10,000 pieces. Royal has done considerable development work on brushes, while George and Data Matics have done very little. The quality and delivery records of the three suppliers on the last ten orders for the brushes are shown below. Renuka Machines Manufacturing Quality Control Department has set an acceptable quality level of three per cent on the brush. Supplier

Quantity
Ordered

Quantity Defective

Delivery

Royal

4,000

122

One week early

Dara Matics

4,000

92

One week late

Sheela

3,000

120

On time

Sheela

6,000

162

Two weeks late

Royal

4,000

38

On time

Data Matics

5,000

29

One Week Early

Sheela

2,000

88

1,000 pieces on time. 1,000 pieces 4
weeks late

Data Matics

6,000

98

Two Weeks Late

Royal

4,000

45

One Week Late

Sheela

5,000

162

One Week Late

Questions
1. Is Dannis Chako justified in eliminating George Machine Company as a supplier of brushes? 2. In what respect is the complaint from George Machine Company justified?

3. Prepare a report for Renuka Thomas explaining the decision to eliminate George Machine company as a supplier. Use quantitative data as much as possible to support your answer ?

Case -2

(10 Marks)

Cause of John Mathai s Sorrow
( A case of inventory car in m.m.)

John Mathai was a very sad man on Sunday, 12 April 1998. He was the Chief Executive of Telecom Insta llations Ltd, TIL, a wholly owned subsidiary of the major producers of telecom equipment in the country: Telecom Manufacturing Company (TMC). Around 88 per cent of the production of TMC was produced for the Government of India under special terms and prices, but t he balance 12 per cent was routed through TIL, who were really the All India Sales, Serving and Installation network of TMC.

John’s wife Sheela, herself a commercial executive with a multinational, found John staring at some sheets of papers after they returned from church. These papers had been delivered by John’s office while they were away. Fearing bad news, Sheela gently took the papers from John. It was a brief performance report of TIL for the justended financial year. The sales had grown at the rate of 32 per cent. Usually a poor performer, the Kolkata region, had done extremely well. The company had...
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