OMIS 627 – Thursday NAPERVILLE
Buffalo Distributors Inc.
Martin Lammer, Joseph Pullins, Cynthia Romano
Needs and Objectives
In order to execute a successful purchasing negotiation, it is important to understand Buffalo Distributors' needs and objectives. Buffalo's needs are determined by their acceptable level of profit, which $1 billion, or $1.52 billion pre-tax. The Company will need to price accordingly to attain that profit level with consideration to all costs. In addition to pricing needs, other needs that Buffalo must consider to execute a successful purchasing negotiation. To begin with, changes can be made to parameters to reduce cost as opportunities become available. Additionally, our quality factor can be taken as low as 35, with our target being 60, and a high of 80. Delivery can be either Buffalo’s or their supplier’s responsibility, but the landed cost objective discussed previously must still be met. Further, distribution technology is set to automated, service strategy is set to high, and responsiveness is set to high. Finally, minimum purchase commitments per month should be in-line with demand, should include a 20% buffer, and should pay respect to seasonality. Product Specificity
Information regarding the specific product our firm is supplying, a predicted lucrative allergy medication, includes standard packaging, transportation of the new allergy medication to be distributed via full truckload, with distribution partners contributing to delivery expense; the predicted cost of transportation will be determined by the location(s) of the manufacturers and the distribution partners. Quantity will impact transportation expense both from the manufacturer and to the distribution locations. Brand name vs. substitution is under review and is dependent on customer demand. Depending on the outcome of our request for quotes and negotiations from our manufacturer(s) we will determine the inventory and selling...
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