1. What is the problem identified in the case? 2. What are the alternative solutions to the problem? 3. What course of action should Erica take? Explain why? Erica Carson "We will do it for 10 percent less than what you are paying the last five years, both suppliers had provided quick and right now." Erica Carson, purchasing manager at Wesbank, quality service, a vital concern of the bank. Almost all a large western financial institution, had agreed to meet checks were mailed directly to the consumer's home or with Art Evans, a sales representative from D.Killoran business address by the suppliers. Because of the imporInc., a printing supplier from which Wesbank currently tance of check printing, Erica had requested a special cost was not buying anything. Art Evans's impromptu and un- analysis study a year ago, with the cooperation of both solicited price quote concerned the printing and mailing of suppliers. The conclusion of this study had been that both checks from Wesbank. suppliers were receiving an adequate profit margin and Wesbank, well known for its active promotional were efficient and cost-conscious and that the price strucefforts to attract consumer deposits, provided standard ture was fair. Each supplier was on a two-year contract. personalized consumer checks free of charge. Despite One supplier's contract had been renewed eight months the increasing popularity of Internet banking, the print- ago; the other's expired in another four months. ing of free checks and mailing to customers cost Wesbank Erica believed that Killoran was underbidding to gain $8 million in the past year. part of the check-printing business. This in turn would Erica Carson was purchasing manager in charge of give Killoran access to Wesbank's customers' names. all printing for Wesbank and reported directly to the vice Erica suspected that Killoran might then try to pursue president of supply. It had been Erica's decision to split the printing and pliers to sell special "scenic checks" that customers paid mailing of checks equally between two suppliers. During for themselves