A Supplier Partnering Agreement at the University of Las Vegas
The supplier partnering agreement at the University of Las Vegas case reflects the initiative of the Nevada Office Supply Company (NOSC) to become the sole supplier of office goods, not only to the University, but also to all state institutions involved in education. NOSC already is a major supplier to these institutions with approximately 50% of the business, and has provided competitive prices, good quality and service in the 15 years the company has been present in the industry. NOSC wants to go beyond and take the full 100% of the business by offering the University a series of incentives in the form of discounts and rebates. NOSC doesn’t want any bidding competition with the other 7 suppliers and gave Mr. Bob Ashby, the purchasing director at the University, 15 days to accept the offer. This case represents a good opportunity for both NOSC and the University of Las Vegas to increase their business ties. Mr. Ashby wanted to reduce the number of suppliers in order to reduce the number of purchase orders, the number of contracts, and the number of delivery trucks on campus. On the other hand, NOSC expects to grow and increase its sales by about 20% next year. This forecast was based on the continuous growth seen in the gaming sector, the education system and the population growth of Las Vegas and the state of Nevada. This partnering agreement will allow NOSC to meet the 20% growth figures forecasted and take the full office supply demand in the region that amounts to $1 million to $1.5 million a year. It will also help the University of Las Vegas to streamline the flow of office supplies and take advantage of the very attractive discounts (between 50% and 70%) in addition to the 2% rebate from all combined purchases when they exceed $1 million offered by NOSC. On the contrary, this agreement will allow NOSC to form a monopoly in this sector and as a result, this move...
Cited: United States. U.S Department of Justice. Competition and Monopoly: Single-Firm Conduct Under Section 2 of The Sherman Act. 2008. Web.
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