Procurement and Contracts



Procurement and Contracts

Q1. Discuss the three alternative options that the company reviewed when its primary distributor filed for bankruptcy, disrupting the supply chain. Discuss the advantages and disadvantages of each alternative option that the company reviewed.

When the company's primary distributor filed for bankruptcy, the entire supply chain of the company was affected. In order to survive and continue with the production, the company came up with three options; first option related to working closely with all the other supply chain partners, the second related to forming a joint venture with another leading supply chain company that fulfilled the demands of the company, (Laffont, 1993). This partnership can be for only the time period that is required for covering the loss that the company faces. The third alternative can be that the company can outsource all of its activities for which it depended on that supply chain company.

The advantages of these options are that the company will be sharing the risks with other partners and will not be responsible for any liabilities in the third option. The disadvantages related to this are that the company can loose control, if the bargaining power of the suppliers surpass that of the company's management.

Q2. Develop a food distribution network (owned and operated by the company itself)

Food distribution network will enable the company to better sell the food and reach out to the consumers effectively, and in turn make good revenues. Food distribution network consists of all the intermedteries that are involved in extracting the food materials, processing it and packaging it in the final form to be distributed to the final consumers. The network may consist of manufacturers, suppliers, retailers, wholesalers and distributors, for that matter, (Inkpen, 1997).

In order for the company to own and operate the ...