Loren Inc
Loren Inc. case
Mana Sadeghi
Brent Miller, the raw material buyer at Loren Inc is preparing for the company’s annual hexonic acid requirement, on June 15. Four suppliers have submitted substantially different bids for this contract which begins in August 1. Loren Inc. is the Canadian subsidiary of a larger chemical company, and have an excellent reputation for quality products and had substantial in total sale. Brent has been appointed raw material buyer, reporting to the manager of chemicals buying group, and the hexonic acid contract will need to be approved by his immediate supervisor and the director of department.
Brent know that some of the company’s policies and procedures should be considered in his recommendations. The purchasing department has worked hard with suppliers to establish a single bid policy, and long term supplier relationship with the best possible long term opportunities were considered Vital to procurement strategy. Multiple sources were favored over single sources, and frequent supplier switching was not recommended, although total volume placed with supplier might change depending on performance and new bids.
Hexonic acid is a raw material used in a number of company’s products, and the company needs approximately 3000 tons of hexonic acid in the next year. Its requirement has grown in years and is expected to grow in the years to come. The requirement for the last year was 2750 tons which was supplied by Canchem and Alfo at 60 and 40 respectively. The previous staff at the purchasing department had suggested a split in the business of 60 percent to Canchem, and 40 percent to Alfo based on a number of factors. One reasin was that Alfo was a start-up at that time, and its quotation was lower than Canchem, but it has been concerns if they can guarantee more than 40% of Loren’s hexonic acid requirement. Brent thinks that, the demand for hexonic acid has eased, and there has been excess hexonic acid inventories, and Brent thought it
Mana Sadeghi
Brent Miller, the raw material buyer at Loren Inc is preparing for the company’s annual hexonic acid requirement, on June 15. Four suppliers have submitted substantially different bids for this contract which begins in August 1. Loren Inc. is the Canadian subsidiary of a larger chemical company, and have an excellent reputation for quality products and had substantial in total sale. Brent has been appointed raw material buyer, reporting to the manager of chemicals buying group, and the hexonic acid contract will need to be approved by his immediate supervisor and the director of department.
Brent know that some of the company’s policies and procedures should be considered in his recommendations. The purchasing department has worked hard with suppliers to establish a single bid policy, and long term supplier relationship with the best possible long term opportunities were considered Vital to procurement strategy. Multiple sources were favored over single sources, and frequent supplier switching was not recommended, although total volume placed with supplier might change depending on performance and new bids.
Hexonic acid is a raw material used in a number of company’s products, and the company needs approximately 3000 tons of hexonic acid in the next year. Its requirement has grown in years and is expected to grow in the years to come. The requirement for the last year was 2750 tons which was supplied by Canchem and Alfo at 60 and 40 respectively. The previous staff at the purchasing department had suggested a split in the business of 60 percent to Canchem, and 40 percent to Alfo based on a number of factors. One reasin was that Alfo was a start-up at that time, and its quotation was lower than Canchem, but it has been concerns if they can guarantee more than 40% of Loren’s hexonic acid requirement. Brent thinks that, the demand for hexonic acid has eased, and there has been excess hexonic acid inventories, and Brent thought it