1. During the 1980s, most of the world's supply of lysine was produced by a Japanese company named Ajinomoto. Lysine is an essential amino acid that is an important livestock feed component. At this time, the United States imported most of the world's supply of lysine—more than 80,000 tons—to use in livestock feed at a price of $1.50 per pound. The worldwide market for lysine, however, fundamentally changed in 1991 when U.S.-based Archer Daniels Midland (ADM) began producing lysine—a move that doubled worldwide production capacity. Experts conjectured that Ajinomoto and ADM had similar cost structures and that the marginal cost of producing and distributing lysine was approximately $0.50 per pound. Despite ADM's entry into the lysine market, suppose demand remained constant at Q = 200 − 80P (in millions of pounds). Shortly after ADM began producing lysine, the worldwide price dropped to $0.50. By 1993, however, the price of lysine shot back up to $1.50.
1. During the 1980s, most of the world's supply of lysine was produced by a Japanese...
TORENTO CONSTRUCTION: ETHICAL CONTRACTING On December 27, 2010, Cary Holmes, manager of the Supply Chain Management (SCM) group at Torento Construction Inc. (NCG), was in his office in Torento, Ontario, trying to organize the thoughts running through his head as a result of a recent bidding to save operating costs at NCG. There was no problem in terms of the final outcome; in fact, the bid was going to result in cost savings of 25 per cent, which was exactly...