Amazon Fertilizer Company Case Solution

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Bottleneck items are low profit impact and high supply risk products. These items are usually low cost but also only purchased from one supplier and leadtimes could tend to be long, so when supply is not available the production process could be stopped. With bottleneck items, preventative measures need to be introduced such as supply risk analysis, careful planning of requirements, ordering extra as buffer stock when there is availability, or the arrangement of consignment stocks. However, due to unreliability a search for alternative products and suppliers is also recommended.

Routine products, also know as non-critical items, are low profit impact and low supply risk items. These are standard quality items that have a small value per …show more content…

They have a large effect on profit, but there are many suppliers and possible substitutes so they are easily available. Leverage products should be bought at volume when the price is low. Improving knowledge of the markets, continually sourcing new products and suppliers, and target pricing and optimising order quantities are recommended for these items. Competitive bidding can also be applied, which targets short term contracts with suppliers.

Based on the information given in the case study and Kraljic Portfolio Purchasing Model, archival storage services would be classified as a routine item since has low profit impact and low supply risk, and the marketing paper would be classified as a leverage item because it has high profit impact with low supply risk.

More Suitable Product for the E-Auction …show more content…

A response to Clauws Records would include a reminder that a RFQ is only a Request for Quotation and as stated by the guidelines provided in contract law, does not constitute a binding contract without some type of acceptance from the buyer, in this case Wendy Ellis as the commodity manager. An acceptance to an offer in business would generally be sent in the form of a document such as a purchase order. Although a RFQ can be quite detailed about requirements, including a large amount of information about product or service specifications or characteristics and quantities to ensure the quoted price is accurate; the RFQ is really an offer and should not be mistaken for a contract. However, the response would also include a RFQ for a one year and five year contract so a good supplier relationship will be

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