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Nationwide Telephone




1.What analytical tools can be used by the supply group to determinethe right price?

Thereare various analytical tools which are used to determine what pricesthe goods supplier is going to charge and if it is correct orcompetitive. They should also be able to compare the prices of othersuppliers who are their competitors. This is because most supplierssell their products at the same price in all the stores they supply.If a supply group feels that their price is too high, then they canask about the price of their competitors to get the approximate valueof the products. If there are some variations, then they shoulddecide on the best price to settle. Suppliers should remaincompetitive, so if their prices cannot be justified, then it is goodto decide from the research to adjust their prices.

Settingup prices that are customized is another tool for determining if theprice charged for goods by suppliers is standard (Monczka, Handfield,Giunipero, &amp Patterson, 2015). Suppliers can earn more profitsthan it could be expected with a policy of single product or singleprice. Most managers of these groups, however, do not recognize theadvantages of product or price customization for different segmentsof customers. A product is perceived to contain a value that is muchhigher for an &quotideal&quot client than it does for a prospectthat is average. By so doing it will be easy for the suppliers tocome up with a fixed price for all their products and will be in aposition to reach their target market as their customers will behappy and satisfied with the prices they offer their products at.This is also an important approach for reducing conflicts with thecustomers. However, if a customer wants customizations added to theirproduct, then the price will be slightly higher (Monczka et al,2015).

2.How could Nationwide’s supply department have prevented the priceescalations?

Toprevent escalations of prices, the department could have periodicallylooked at their expenses to see instances when the costs increasedand why. Knowing the reason for increased prices could have assistedin making negotiations with the suppliers. For the reduction of itemsthat are non-critical in logistics or administration costs could haveprevented increases in price. For items that are critical thataccount for a huge percentage of the operation of the business, thenthe costs of their supply should either be secured in a contract thatis long-term or search for substitutes that are cost-effective. Thisimplies that the global department of supply could have preventedthis by understanding the key cause of this escalation. This wouldhave assisted in finding immediate solutions to the problemidentified.

Iffirms like Nationwide are faced with the challenge of priceescalation, which often faces most companies, they should choose topass it along to clients in one way or another. The best approachthat this department of supply could have taken is increasing theretail price. They could have also redesigned the product to lowercosts of production or replace ingredients that are more expensivewith those that are less expensive. In the instances of controllingincrease in price, they should have also chosen to maintain a productprice that is stricter but minimize the quantities of expensiveingredients contained in the product. To avoid running the company ata loss, they should have ensured that they also raise the productprice to the client. This would have maintained a profit margin.

3.How does the competitive condition of the plastic component industryimpact the use of price analysis?

Therelationship that is favorable between prices of oil and natural gasand the abundance of natural gas liquids has reshaped thecompetitiveness of petrochemicals and, ultimately, the plastic resinscompetitiveness within the marketplace that is global. By early 2015,the U.S. remains the third lowest producer of low-cost ethylene afterCanada and the Middle East (Eramo, n.d.). To capitalize on the shaleadvantage of U.S., approximately $130 billion dollars of investmentsthat are new in the chemical manufacturing capacity has beenannounced, and it also includes approximately $25 billion ofinvestments in the new plastic resin production (Eramo, n.d.). A goodexample of this is that the capacity to generate polyethylene, themost advantaged resin, is expected to increase by more than half overthe next ten years.

Sinceenergy resources which are 70% of total costs for producers ofplastic resin are the primary raw materials composition of plasticresins, the energy price feedstocks is important to the globalcompetitiveness of producers of plastic resin. While half of thenewly produced resin is exported to foreign markets, processors ofdomestic plastic also gain from expanded production of resin that isshale advantaged: more than 400 projects to establish or expand thecapacity of processing of plastic in the U.S. were announced in 2012.The announcements represent only a small fraction of the new volumerequired to convert resin that is advantaged into products that areuseful. In the next decade, a value of $19.6 billion of capacity ofplastic processing is expected to be established to increase theability to manufacture products made of plastic from supplies ofplastic resin that is domestically-sourced

4.What kind of resistance might Jan encounter from Bill? How can Billhelp facilitate the pricing analysis process?

Janis a talented young woman who has lots of knowledge and experience inanalysis of price. Since she is a graduate from a recognizeduniversity, it implies that she has a good background in her area ofspecialization. In addition to this, Jan has knowledge on how tooperate a computer, so she is aware of most computer applicationsthat help in pricing. On the other hand, Bill is experienced in priceanalysis of plastic and hardware.

SinceBill is an old man who is just about to retire, he may not fullycorporate with Jan because she is young and he has more experience inthis field, unlike Jan (Lester Rogers, 2012). Secondly, he may notbe ready to exploit technology to examine the issue at hand becauseof the ignorance and lack of knowledge of the value of application oftechnology to solve the problems facing their firm. This implies thatit will be very hard for these two people to work together as it willlead to too much time wastage. Bill can be of valuable help in theprocess of pricing analysis using his experience in this firm. Sincethe main intention is ensuring that the cost of production isreduced, he can assist by providing strategies for cost reduction andfixing favorable prices on their products to avoid a further loss tothe firm.

5.What are some of the costs/benefits of continuing to source from thesame local Suppliers?

Localsourcing involves trading with more interest in supporting thecommunity, but it provides a significant difference in price, whichmay cause that feeling of support to disappear. Looking for localsourcing that is cost-effective can give a firm a variety in theline-up of their product and agility that is greater (Yeniyurt,Henke, &amp Cavusgil, 2013). Market changes call for adjustments inthe supply chain. While sourcing overseas, the adjustments takeeffect slowly when dealing with producers of high volume andshipments. Local suppliers are in a position to make adjustments morequickly and as such become agiler. By sourcing for goods that arelocally produced, a firm can broaden their product line-up and alsosimultaneously build relationships that are closer to theircustomers. This brings a sense of pride when a client goes to theshop and buys products from people who are known or from firms seenin their backyard. There are also the right public relations producedfrom community support around the enterprise showing a desire tobuild and invest as well as building those around them (Yeniyurt etal., 2013). Firms should look for a way to make the partnership withlocal suppliers if possible. This, however, requires the applicationof creative thinking.

Ifsuppliers source locally, there is also the benefit of low cost ofproduction as such goods will have a considerably low price than thegoods sourced internationally. This is because there will be notaxation at the customs duty, unlike the imported products which aredouble taxed thus making the cost of production very high for thefirm involved. This gives them the advantage of selling the productsat a relatively low cost, and they are thus able to maintain theirclients due to their favorable prices


Eramo,Mark (n.d.). Global Ethylene Market Outlook: Low Cost Feedstocks FuelThe Next Wave Of Investments In North America and China. IHSChemical. Retrieved November 27th 2016 fromhttp://media.corporate- ir.net/media_files/IROL/11/110877/05_Global_Ethylene_Market_Outlook_Eramo.pdf

Lester,D. &amp Rogers, J. (2012). Crisis intervention and counseling bytelephone and the Internet. Springfield, Ill: Charles C. Thomas,Publisher.

Monczka,R. M., Handfield, R. B., Giunipero, L. C., &amp Patterson, J. L.(2015). Purchasing and supply chain management. Cengage Learning.

Yeniyurt,S., Henke, J. W., &amp Cavusgil, E. (2013). Integrating global andlocal procurement for superior supplier working relations.International Business Review, 22(2), 351-362.