American Military University
Case Name: Pacific Healthcare
I. Major Facts
Pacific Healthcare and its subsidiaries consists of Pacific Memorial, Pacific Cabrillo, and Pacific Isla Vista. It is the largest provider of healthcare in Santa Barbara County. The director of supply management is Barney Rubble, who is responsible for procuring supplies. Before passing away, Thurston Howell, director of radiology, made all decisions involving the purchasing of X-ray film. Kodak film has been the sole provider of X-ray film for the last 15 years. Kodak film is of the highest quality, but currently priced well above industry competition. Additionally, Pacific Healthcare has an equipment services agreement with Kodak. Agfa and Dupont are alternative suppliers that offer cheaper prices than that of Kodak, without sacrificing quality. While additional competitors, Fuji and 3M meet specification requirements and are cheaper, they are generally considered a lower quality film. II. Major Problem
Pacific Healthcare wants to award a one year contract to a supplier who provides the lowest cost without sacrificing quality or service. III. Possible Solutions
A. Pacific Healthcare could continue to utilize Kodak as its single source provider. The obvious advantages of staying with Kodak would be that there would be no decline in quality or service delays. An important disadvantage is that with Kodak priced much higher than the competition, there would be minimal opportunities to save on material costs. B. Pacific Healthcare can choose to award a contract to Agfa or Dupont. This option would allow them to maintain the quality they are accustom to, as well as save up to $164, 250.00 in X-ray film costs for the year. The likely disadvantage would be the loss of maintenance and services already provided by Kodak. C. Pacific Healthcare could option for the 3M or Fuji X-ray film as well. A savings of up to $246,375.00...