Question

Reconsider Figure. Suppose Supplier B improves its conformance quality so that the chemicals it produces are now 99.9% pure. The chart at the top of this page shows the new competitive situation:
a. Will this be enough to make Supplier B competitive? Which supplier do you think will win the business?
b. Managers at Supplier A have determined that if they increase the minimum order size to 80 liters, they can decrease their costs to $18 per liter. Should they do it? Explain your logic.




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  • CreatedApril 10, 2015
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