Please help! 

 ATTACHMENT PREVIEW Download attachmentPEGASUS TECHNOLOGIESIn June 2002, Linda Wang, procurement specialist for Pegasus Technologies, Phoenix, Arizona,and three teammates were responsible for recommending which of four potential suppliers shouldreceive a purchase order for the next year’s requirement of 8-inch touch-screen color LCD panels.The panels were expected to be of exceptional quality, with extra high resolution. Pegasus wasrecognized as a leadingmanufacturer of several lines of handheld pallet style computers. Thetouch-screen capability enables a user to work with the computer without a mouse or keyboard.The latest in this line of products was the PT 9000, a high-quality computer with a 3-gigahertzprocessor, 200 megabyte hard-drive, and an optional removable DVD writer.The PT 9000 wasdesigned for industry use in harsh climates.Initsnearlythreeyearsofoperation,Pegasushadgrownfromasingleproductmanufacturer with annual sales of around $250,000 to a multiproduct $5 billion firm. Thecompany has always had a reputation for high quality. Funds have never been compromisedwhere research and development is concerned.Pegasus intended to buy the touch-screen from one of the four potential suppliers. It wasestimated that the demand for the next year would be in the region of 1 million monitors.Forecasts indicated that this demand was expected to grow at an annual rate of 20 percent overthe next three years. In order to maintain a uniform quality, the company policy was to use asingle source of supply as far as possible.Indeterminingthesupplierforthetouch-screen, Linda was assisted by the followingpersons, who brought a varied line of expertise to the source-selection team:•Arno Berg,the senior engineer, had been with the company for fourteen years andcurrently was its R&D chief. He held an engineering degree from a Norwegianuniversity and an M.B.A. from the University of San Diego.•Kevin Rice,financial analyst, had recently joined Pegasus after moving from LosAngeles, where he worked for three years with Pasadena Financial Corporation. Heheld an M.B.A. from UCLA.•John Harper,quality assurance, had been with the company for eight years. He hadan engineering degree from MIT and had a reputation for being a very tough manwhen quality was in question.Theresponsibilitiesoftheteamincluded:1.Identifying potential suppliers.2.Preparing a brief comparative statement of the key suppliers.3.Developing a brief analysis of each potential supplier.4.Recommendingthesupplierwithwhomtheordershouldbeplaced.Thisrecommendation was to be made to a corporate-level review board.

View the AnswerAfter a preliminary review, including visits to all potential suppliers and a detailed review of theirfacilities, equipment, management systems, and supply departments, the team hadnarrowed the list of potential suppliers to four manufacturers:1.Reese Corporation,the largest manufacturer of LCD panels under consideration,with annual sales of about $6.5 billion, had been in existence since 1994 and was theindustry price leader. Recently management had indicated that the company wouldnot be interested in any order of less than $500 million per annum. This decision wasmade after Reese had put in a bid for the Pegasus contract. Reese’s price was $245per unit.2.Capozzi Manufacturingwasa large and highly renowned manufacturer of computerequipment, including LCD panels. With sales of nearly $2 billion, more than half ofwhich were through the sale of monitors, the firm was the second largest of its kindin the area. Its price was $250.3.Kruger Corp.had recently entered the market with a new range of touch-screenpanels. In its short life of four years, Kruger had established a reputation for qualityand innovation. Kruger maintained that its success was largely based on heavy R&Dexpenditures. The firm quoted a price of $275 per unit.4.Payne Industries,the smallest of the four potential suppliers, looked attractive sinceit quoted a price of $240, which was about 4 percent lower than Reese or Capozziand 14 percent below that of Kruger. If selected, Payne would devote almost all of itsproduction capacity to the Pegasus contract. Industry experts viewed the company asone of the most promising and dynamic new corporations in the industry.Sincetheestimatedcontractwasforabout$250 million, Linda was aware of the criticalnature of the decision. She had to turn in the team’s recommendation within a week.1.Briefly analyze the data provided in Exhibit 1 for each of the four potential suppliers.(Compare the figures with industry averages where necessary.)2.On the basis of the information contained in Exhibit 1, which potential supplier looksmost attractive? Why?

Show

Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code "Newclient"