Sampson products case

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Sampson products case

Hire Writer Sampson had been awarded the contract after bidding competitively against one of Sampson products case other large motor manufacturers and five of the smaller firms.

Although the contract terminated annually, new contracts had been negotiated each year to the satisfaction of both parties, and Sampson had obtained the contract to manufacture motors for General again during Sampson succeeded in making an average before-tax profit of 9 percent on this contract, which management considered very satisfactory for this type of business.

General manufactured these shafts in its machine shop division, which had been acquired in a merger seven years ago. In FebruaryMr. When the contract was developed, it contained a clause that provided General with an option to cancel the agreement at any time, with a three-month notice to Sampson.

Jones, sales manager for the machine shop division of General, assured Mr. Smithe that his company would exercise the option only in the case of highly unusual, unforeseen circumstances.

The shafts were made of a special alloy that was in very short supply. Moreover, there were strong indications that the U. Although Sampson was impressed by the performance of General shafts, Mr.

Smithe decided to solicit competitive bids from several prospective suppliers. After investigation, he selected four major motor shaft manufacturers that had outstanding reputations for quality, service, and efficient operations.

General Company was one of the producers from whom a quotation was requested. Jones and the president of the machine shop division of General visited Mr. Smithe understood that the president had a widely recognized reputation as an extremely aggressive, hard-hitting, sales-minded executive.

Smithe informed the president that his bid was the highest received, and he suggested that the president knew by approximately how much he was high.

Smithe stated that normally second bids were not accepted, but because of previous friendship he would in this case accept a revised bid from General. Smithe set aside the shaft contract during the ensuing two weeks, partly as a result of his offer to the General representatives and also because he wanted to devote time to other problems.

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At that point, the president of Sampson Products asked Mr. Smithe to come to his office. The chairman appeared to be exceedingly interested in getting that motor shaft contract you are presently considering. It seems the president of the machine shop division needs the work and is eager to get the order.

Smithe proceeded to outline the events surrounding the contract to the president.

Sampson products case

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Sampson products case
Sampson Products Corporation – Assignment Example