Case 1 Questions

Raphaella Mercier
Case 1 Trade Barter, the Rimzi Chamber of Commerce and the Rimzi University of Economics

1. What kind of studies should the Chamber perform to assess the likelihood that RUE could benefit from use of the trade barter system?
The Chamber members should conduct studies to see what exactly the university would be in need of most, to see if the trade barter system would be beneficial. The study should also be conducted to see what the university has to offer in barter. The results should then be used to conduct a study to see which trade barter members have offerings of equal value that would consist of RUE’s necessities.

2. What specifically could the university offer in barter?
Much like other universities, RUE could offer tuition discounts in barter to fill up empty classroom and encourage students to continue their education into higher degree programs (i.e graduate school.) The university could also offer used technology that can be recycled by other companies and excess classroom space in barter.

3. What specifically would the university want in return for their barter offerings?
In return for their offerings, RUE would want items that would be considered as the “spend” for the university. Such items include classroom and cleaning supplies, advertising and promotion, spacing accommodations for seminars and lectures, and “spend” items involved in programming student activities. In addition, “the University might also trade for insurance, security, health, catering services and catering equipment such as conventional ovens.”

4. What are the issues here that should be considered by the Chamber’s president, Ms. Marmaris?
Ms. Marmaris should consider the fact that she may not be able to find many companies that will have the supplies that RUE is in need of. For example, the president’s business trade with J.D Office only exists because of a surplus of goods. Most companies try to avoid surplus, therefore it will be harder to obtain a similar relationship with many other companies. Another point to consider is the agreement issue. Whenever the Chamber president trades goods with goods, there may be a lack of similar measure in value. This could cause serious issues for both parties if they feel like their offering is worth more then what is received.

5. Do you think Ms. Marmaris should use the barter system to eliminate the necessity of additional university funding? Why or why not?
I believe the president should use the barter system because it proves to be a beneficial, short-term rationale and alternative to additional university funding. The system is also a way to “optimize available resources.” As long as both parties use the system correctly, ethically, and efficiently it will be a dual advantage. RUE can benefit in the trading of goods for goods and suppliers like J.D offices will benefit from the value it creates along the supply chain. Additional university funding is not as effective as “the utilization of its under-utilized assets” because it does not allow the university to better manage cash flow.