General Study
SELECTION OF A PRESSURE VESSEL MANUFACTURER
On August 1, the engineering department hand-carried a purchase requisition to Jack Toole, supply manager, Oceanics, Inc. The requisition covered the purchase of one pressure vessel to Oceanics’ specifications as outlined in the requisition. Immediately, Jack went to work. He prepared a request for quotations asking twenty major pressure vessel manufacturers to have their proposals in his hands no later than Wednesday, August 31. The response to Jack’s request for quotations was amazing. During the month of August, eighteen of the twenty companies hurriedly prepared their proposals and submitted them to Jack within the allotted bidding time. As each proposal was received on Jack’s desk, copies were forwarded to the engineer and manufacturing engineer for preliminary evaluation. By September 5, Jack called a meeting in his office with the engineer, Mr. Holpine, and the manufacturing engineer, Mr. Grinn. During the course of the meeting, proposals were carefully screened and bidders were eliminated one by one until two companies remained. It was a difficult decision for the group to decide which of the two companies submitted the better proposal. The advantages and disadvantages of each supplier appeared to be about equal. Jack pointed out that Atomic Products Company submitted a lower estimated price, guaranteed the equipment, was more suitably located, and would meet the required delivery date. Jack also pointed out to Grinn and Holpine that Nuclear Vessels, Inc., offered Oceanics lower hourly and overhead rates, a minimum amount of subcontracting, and excellent past experience in making similar vessels. Jack stated that a field trip would be necessary to talk with both suppliers to determine which one was best qualified. At this point, the meeting was adjourned and plans were made to visit both companies the following week. (See Exhibits 1 and 2.) In following through with supply management policy, Jack called the vice
On August 1, the engineering department hand-carried a purchase requisition to Jack Toole, supply manager, Oceanics, Inc. The requisition covered the purchase of one pressure vessel to Oceanics’ specifications as outlined in the requisition. Immediately, Jack went to work. He prepared a request for quotations asking twenty major pressure vessel manufacturers to have their proposals in his hands no later than Wednesday, August 31. The response to Jack’s request for quotations was amazing. During the month of August, eighteen of the twenty companies hurriedly prepared their proposals and submitted them to Jack within the allotted bidding time. As each proposal was received on Jack’s desk, copies were forwarded to the engineer and manufacturing engineer for preliminary evaluation. By September 5, Jack called a meeting in his office with the engineer, Mr. Holpine, and the manufacturing engineer, Mr. Grinn. During the course of the meeting, proposals were carefully screened and bidders were eliminated one by one until two companies remained. It was a difficult decision for the group to decide which of the two companies submitted the better proposal. The advantages and disadvantages of each supplier appeared to be about equal. Jack pointed out that Atomic Products Company submitted a lower estimated price, guaranteed the equipment, was more suitably located, and would meet the required delivery date. Jack also pointed out to Grinn and Holpine that Nuclear Vessels, Inc., offered Oceanics lower hourly and overhead rates, a minimum amount of subcontracting, and excellent past experience in making similar vessels. Jack stated that a field trip would be necessary to talk with both suppliers to determine which one was best qualified. At this point, the meeting was adjourned and plans were made to visit both companies the following week. (See Exhibits 1 and 2.) In following through with supply management policy, Jack called the vice