Question

THE DUTZEL DIESEL (A 1250 word essay)

I. Major Facts

State the major facts as you see them. Make Statements clear and concise for your own understanding.

II. Major Problem

State here the major problem as you see it. You may want to phrase the statement in the form of a question. A good problem statement will be concise, usually one sentence.

III. Possible Solutions

a. List several of the possible solutions.

b. Do not limit the list to a few possible solutions.

c. You may however, wish to include portions of one solution in another.

d. Note advantages and disadvantages of each possible solution.

IV. Choice and Rational

State here your choice, and detail the reasons for your choice, including the reasons for not choosing your other listed possible solutions.

V. Implementation

a. Include a properly formatted bibliography page

Standard Business English with fewer than five grammatical/punctuations errors

assignments MUST contain evidence of secondary research and works cited page. A minimum of three sources must be included.

Submit a Bibliography page as evidence of the secondary research would be attached as the last page of the essay.

THE DUTZEL DIESEL CASE

      Jack Haley, a senior supply manager for the Dynamite Truck Company, was confronted with an

interesting predicament—and possibly a trip overseas. Rising gasoline costs and increased foreign

competition had caused the management at Dynamite Truck to develop a new truck powered by

an air-cooled diesel engine.

      From bumper to tailgate, the new vehicle was designed as a full-performance diesel

truck. It was heavy-duty throughout: frame, suspension, brakes, axles, and steering. It was built to

endure. Under normal operating conditions, the new truck, using an efficient air-cooled diesel

engine, was designed to yield 18 to 20 miles per gallon. The warranty was for 100,000 miles or

two full years, whichever came first.

     Jack had been actively involved in the development of the new truck. He provided the

Dynamite engineers with information on the availability and cost implications of various

materials, components, and subassemblies under consideration. From a technical, cost,

availability, and service point of view, the diesel engine was the most crucial item to be

purchased for the new truck.

Jack obtained technical data on four air-cooled diesel engines that appeared to satisfy

Dynamite’s requirements. Two of the manufacturers of these engines were located in Europe, one

in Japan, and one in the United States.

Discussions with the program manager indicated that from a technical point of view, each

of the diesel power plants was acceptable. Accordingly, all four manufacturers were invited to

submit bids. The request for bids stipulated an estimated requirement of 10,000 engines per year

for each of the next three years.

     The date specified for the close of the bidding period was Friday, June 13. All four firms

submitted bids by the established date. Dutzel Diesel of Gailsdorf, Germany, was the low bidder

with an F.O.B. destination price of $14,263 for the first year, and a standard price escalation

clause for the second and third years. The second lowest bidder was a U.S. firm, the Great

American Diesel Company. Its price bid for the first year was $16,287 per engine. The price for

the second and third years contained the same economic escalation clause as Dutzel’s bid.

Jack sat contemplating a course of action. He wondered if the $2,024 per unit price

differential required to buy the U.S. engines could be justified. He also wondered about the

necessity of a trip to Gailsdorf to perform a survey on Dutzel prior to awarding the contract.

                   1. Do you believe that buying from global sources is destined to give supply managers

                        an increasing number of problems? Discuss.

                   2. What is the easiest way for supply managers to start buying internationally?

                   3. If you were Jack, how would you decide this issue?

Answer 1

1. There are numerous dangers with purchasing from worldwide sources. It is anything but difficult to discover sourcing alternatives, however discovering dependable and quality choices is troublesome. A portion of the dangers required with worldwide sourcing are issues with traditions, shipping deferrals and quality control issues. With worldwide sourcing you can show signs of improvement evaluating for certain things however with the issues it could out way the cost reserve funds. To assess a potential provider, you can perform office visits, provider reviews and outsider evaluators. I would have the provider assessed before contracting with them.

2.Using a go-between to begin purchasing globally is the least demanding approach to buy. There are various sorts of worldwide exchange middle people; the least demanding strategy is with import dealers. Notwithstanding import vendors there are commission houses, agents or delegates, import intermediaries, exchanging organizations, and auxiliaries. It isn't the least expensive course experiencing a middle person nor is it the most financially savvy approach to source internationally. The most minimal value course is immediate acquisition yet requires greater contribution with the makers and providers. Utilizing a mediator will deal with that at a greater expense premium. The most straightforward way organizations can purchase globally is by first building up the sourcing technique which in fact may fluctuate crosswise over items. The sourcing methodology tends to the inquiry on whether the organization is looking to source from new goals, and provided that this is true, what the primary criteria are for the new sourcing goals. The chiefs should take a gander at inside and out issues, for example, the cost, conveyance means, and nature of the item, the item administration and the universal models. This procedure ought to be made before you go global. When these issues have been investigated, at that point, the ranking director can begin consulting with the worldwide providers.

3. As a matter of first importance, I would advise be able to Jack that a worldwide acquiring framework is the best approach in the creation of vehicles if an organization needs to increase worldwide system in making the most open doors of worldwide providers. I encourage him to set up a sourcing arrangement that is gone for augmenting proficiency all-inclusive by settling on that choice on purchasing parts from providers with the capacity of offering ideal cost, quality, and administration terms. The value differential of $2024 for US motors is lined up with the mechanical of the motor segment. The vulnerability of making a trip to Gailsdorf, Germany to play out a study on Dutzel whenever granted the agreement is welcome since it will resolve the complexities of ability required so as to create it.