i need help adressing the issues of long term contracts in this case

Don Peters was manager of the Production Fuels Department of Buckeye Power & Light Company (BP&L), a small utility in southeastern Ohio. BP&L had three steam electric power plants-located in Athens, Zanesville, and Steubenville-whose primary energy source was coal. Each month, coal for those plants was purchased from a heterogeneous collection of vendors in Ohio, Pennsylvania, and West Virginia, ranging in size from small father-and-son operations to large mining companies. Peters was responsible for the monthly coal-procurement process, including how much to purchase from each vendor and which specific plant (or plants) each vendor should supply. In October 1986, Peters' immediate task was to determine November's coal-procurement schedule. BP&L had recently retained the services of a consulting firm to analyze aspects of its operations, including the coal-procurement process. Peters hoped to use the opportunity of the consultant's analysis to rethink the entire procurement process. He also hoped the report would shed some light on two related issues that had been a source of controversy within the department Long-Term Contracts Because of a utility's need to have a guaranteed source of fuel, long-term contracts with coal vendors were a long-standing industry practice. A long-term contract with a vendor obligated the utility to buy a minimum amount of coal each month from that vendor at the contract-specified price. The balance of the utility's needs were met by purchasing additional coal on the spot market Prior to 1973, BP&L had purchased approximately 65% of its coal on long-term contract. The energy crisis of the 1970s and resulting surge in demand for coal and coal prices had precipitated an upward trend in that figure. By 1986, BR&L was purchasing 80% of its coal on long-term contract (vendors in late 1986 with whom BP&L had long-term contracts and the contract amounts are indicated in Exhibit 1). As the energy crisis eased, however, the availability of coal became less of a concern. Moreover, by 1986 prices on the spot market were running about $6 per ton less than long-term contract prices. Many people in the Production Fuels department thought that the percentage of coal purchased on long-term contract should be reduced perhaps back to the 65% level. Peters estimated that returning to the 65% figure would allow BP&L to reduce the amount of coal purchased on long-term contract by 12,000 tons. If such a reduction were to be made, it was not clear to Peters which of the current long-term contracts should be reduced and/or eliminated. (e) Help Peters address the issues of long-term contracts. Questions you may want to address, but are not limited to, - Effect of reducing the long-term contract from 80% to 65%. - Strategies to implement the new policy (how to reduce the long-term contract for each vendor) - Etc . Don Peters was manager of the fuel department of Buckeye Power and Light Company (BP & L), a small utility company in southern Ohio; The company operates 3 steam electric power plants; . The primary energy source is coal; Each month, coal for the plant was purchased from an heterogeneous collection of vendors; Peters was responsible for the monthly coal procurement process: The company has retained the services of consulting firm to analyze the November coal procurement decisions. . Peters wants to use the consulting report to rethink two issues: long term contracts, and safety stock at each plant