Question

Purchase Negotiation Case:

Common Information

This simulation involves negotiating the purchase of an automotive fabric. The following information is common to all groups participating in the negotiation:

• There are four potential manufacturers of textile products. These include the following:

  • Athena Corp. - Annual sales of approx. $ 40 million dollars, located in Bowling Green, Kentucky..

  • Cybaris Corp. - Annual sales of approx. $ 50 million dollars, located in Charlotte, NC.

  • Medusa Corp. - Annual sales of approx. $ 20 million dollars, located in Columbus, OH.

  • Orion Corp. - Annual sales of approx. $ 35 million dollars, located in Grand Rapids, MI.

• There are four potential purchasers of textile products. These companies are second tier automotive suppliers, who supply the major automotive companies located in Michigan, Ohio, and the Southeast. These companies have all purchased in small quantities from all of the suppliers, and include

the following:

• King Corporation, located in Greenville, SC, has requirements for 150,000 yards of fabric for 2001. The products will be required in 2002 and 2003 according to current plans, and volumes are expected to increase.

• Queen Corporation, located in Knoxville, TN, requires 250,000 yards of the fabric for 2001, but volumes for 2002 and 2003 are uncertain.

• Duke Corporation, located in Cleveland, OH, requires 100,000 yards of the product, and production volumes required are expected to increase by 50% or more in 2002 and 2003.

• Duchess Corporation, located in Lansing, MI, requires 200,000 yards of the product, and volumes are expected to decrease somewhat in 2002 and 2003.

• Prices for similar fabrics are in the $12.00 to $15.50 price range per yard.

• All identified suppliers are able to produce to specifications provided by the purchasing company. However, quality performance related to the product can vary greatly.

• Individual cost structures of the firms providing the fabrics can vary significantly.

• Suppliers provide widely different levels of service and technical support.

• All suppliers have to satisfy the same quality and delivery terms, payment terms, and transportation (FOB seller's plant).

  Industry capacity utilization is about 75 percent.

• All purchasing companies have purchased relatively small amounts from all of the suppliers previously, never totaling more than $100,000 per purchase.

Question:

1. Create a written contract for both buyer and seller with inclusion of schedule A and B

Answer 1

Purchase and sales agreement

This agreement is entered into as of the date 26 June 2019 by and between .....(seller) and.....(buyer) . Every information regarding this steel is discussed in this agreement made between both the parties.

1. Sale of goods : Seller  agress to sell the goods and buyer agrees to purchase the items in quantities at prices list below

Description	quantity	Price
Automotive fabric	...... yards	......$

2. Purchase price : bio will pay to seller for goods as the full and complete purchase price the sum of ....$ . buyer is responsible for all taxes to be levied on goods.

3. Payment: seller is responsible to invoice buyer upon shipment of goods payment shall be made within 10 days of date of sellers invoice.

4. Delivery : Cello shell ship the goods to buy a on or before they decided to following address : .........,America. Bio will pay for shipping cost.

5. Warranty :buyer acknowledges that and also the seller agrees that he represent a warranty with the quality of goods.

6. Risk of loss : risk of loss of goods shall pass to buyer upon shipment of goods.

7. Governing law : this agreement shall be governed by and in accordance with the law of USA.

8. Disputes : Any dispute occurring despite this agreement shall be resolved with mediation. And if  mediation does not work then the issue shall be resolved with the American arbitration Association.

In witness thereof,  the board of directors of supplier and buyer.

SIGNATURE

Seller's signature : _______________

Buyer's signature : _______________