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FOUR SQUARE LUMBER MILL Jon Johansen was the supplies buyer at Four Square's Valdosta plant. One day he sat examining a traveling requisition (TR)...
FOUR SQUARE LUMBER MILL Jon Johansen was the supplies buyer at Four Square's Valdosta plant. One day he sat examining a traveling requisition (TR) card for ten carborundum saw blades. The specified blade was made in Switzerland and obtainable through a mill supply house in Birmingham at a cost of $225 each, F.O.B. Birmingham. Jon observed on the TR that some 110 blades were ordered a year. The requisition specified that no substitutes were permitted. Even so, Jon decided to see if any money could be saved through alternative sourcing. He contacted two of his better mill supply sources to see what they could do. Both suppliers indicated that the Dipson 412 blade was every bit as good as its Swiss counterpart. Based on an annual purchase of eighty or more blades, one supplier quoted a unit price of $112.50 per blade. (The second supplier's price was $115.00.) Both prices were F.O.B. Valdosta. Jon then contacted Sam Sharpe, the foreman of sawing operations at Four Square. Jon explained the potential savings and asked Sam to give the American blade a try. Sam was certain that the Dipson blade would not stand up to the Swiss blade. After several minutes of trying to convince Sam of the desirability of buying the Dipson 412, Jon said that he thought that they really should give it a try. Sam left in a good humor saying, "O.K., but I know it won't work." Jon ordered ten Dipson blades. He included a provision that any unused blades could be returned for credit if the Dipson did not prove to be equal to the Swiss blade. Two days after the blades arrived, Sam entered Jon's office. Sam was grinning from ear to ear, holding a saw blade in each hand. Both blades were burned as a result of the excess heat generated during the cutting operation. Jon was convinced that the boys in the yard had treated the blades unfairly to ensure that they would fail. 1. What could Jon have done to avoid this situation? 2. What should Jon do now?
